Copper Heads for First Weekly Drop in Four as China Moves Release of Data

Sep 10 (Bloomberg)--

Copper extended yesterday's slump, heading for the first weekly drop in four, as China brought forward the release of August economic data to Saturday, prompting speculation the results may disappoint investors.

The metal for three-month delivery dropped as much as 1 percent to $7,480 a metric ton on the London Metal Exchange, and traded at $7,550 at 3:16 p.m. in Shanghai, heading for a 1.3 percent loss this week. Copper for December delivery on the Shanghai FuturesExchange closed 0.4 percent higher at 58,810 ($8,691) a ton.

"There's lots of talk, ranging from the government probing inappropriate trading to possible rate hikes,” said Ren Gang, analyst at Maike Futures Co., from Shanghai today. "It's made people very cautious in the wake of yesterday's tumble.”

China's National Bureau of Statistics said yesterday it will release August economic indicators, including consumer prices and industrial output, on Saturday, instead of the initially scheduled Monday.

"The statistics bureau has almost never reported data on weekends before,” said Chen Jianbo, a fixed-income analyst at BOC International (China) Ltd. The change prompted speculation that the central bank may raise the deposit rate to combat inflation before the markets open on Monday, Chen said.

Commodity futures in China tumbled yesterday after a report said regulators may be investigating large positions in Shanghai rubber futures. "There is no official comment from the regulator, so people kept on guessing what happened,” Ren said.

China Imports

China's copper and products imports climbed for the second month in August, expanding 11 percent to 379,527 tons from 342,901 tons in July, on expectations of a seasonal increase in demand. Imports of scrap copper climbed to 400,000 tons in August from 380,000 tons, China's customs office said today.

Aluminum in London advanced 1 percent to $2,125 a ton. Aluminum for December delivery in Shanghai closed 1.4 percent higher at 15,790 yuan.

"News that some smelters have been ordered to cut production to meet the country's energy-saving targets is offering some psychological support to aluminum,” Liang Lijuan, an analyst at Cofco Futures Co., said by phone from Beijing. "But I don't think it will lead to a big drop in output.”

To meet its energy efficiency targets, China has asked steel, cement and aluminum producers to reduce production. Data provider Shanghai Metals Market said in a report Sept. 3 that no smelter had started to cut output and said the worst case scenario would be a slight monthly decline toward the end of this year.

Zinc in London was little changed at $2,154 a ton and lead dropped 0.7 percent to $2,185 a ton. Nickel was unchanged at $22,750 a ton and tin fell 0.2 percent to $21,650 a ton.