Cop­per eases, doubts about China de­mand dom­i­nates

The Financial Daily - - MARKET SUMMARY -

LON­DON: Cop­per fell on Wed­nes­day to its low­est in nearly two weeks, as in­vestors wor­ried about a lack of de­mand from top global met­als buyer China.

Bench­mark cop­per on the Lon­don Metal Ex­change closed at $9,381 a tonne from $9,590 a tonne at Tues­day's close, on track for a 5-per cent fall in March, its first monthly de­cline since June 2010.

It ear­lier hit its low­est since March 17, at $9,341 a tonne, some 8 per cent be­low a record high of $10,190 hit on Feb. 15.

"All the bets were put on China," said Eu­gen Wein­berg, an an­a­lyst at Com­merzbank. "Sen­ti­ment in China is not as rosy and not as up­beat as sen­ti­ment in Europe or the US," he added.

China has been ab­sent from the cop­per mar­ket for some months now, and an­a­lysts and traders are be­gin­ning to ques­tion whether it will come back be­fore prices fall fur­ther.

An­a­lysts also pointed to an abun­dance of cop­per stocks in China. "We are cau­tious on cop­per's out­look ... It could be just be mon­e­tary tight­en­ing im­pact­ing on the cop­per mar­ket," said Nic Brown, an an­a­lyst at Natixis. "It could be a re­flec­tion of cop­per stock­piles built up in 2009 and now be­ing run down." Shang­hai cop­per gains Three-month cop­per on the Lon­don Metal Ex­change edged down $4.5 to $9,585.50 a tonne by 0701 GMT. Shang­hai's most-ac­tive cop­per fu­tures con­tract gained 0.7 per cent to 71,300 yuan ($10,868).

China's State Re­serves Bu­reau and con­sumers are ex­pected by an­a­lysts to have built up large stocks of cop­per in 2009, when prices ranged be­tween $3,000 and $7,500 a tonne.

"The mar­ket is ner­vous, watch­ing and wait­ing, not sure China is in the mar­ket for cop­per this year," a trader said.

He added: "The cri­sis in Ja­pan and the Mid­dle East is keep­ing in­vestors away. They are wait­ing to see the im­pact on growth over­all from what's go­ing on in these places."

Also in the spot­light are stocks of cop­per in Lon­don Metal Ex­change ware­houses, which are near 440,000 tonnes, up more than 25 per cent since early De­cem­ber and at their high­est since July last year.

Zinc closed at $2,338 a tonne from $2,375 and lead, un­traded at the close, was last bid at $2,655 a tonne from $2,685.

Tin closed at $31,250 a tonne from Tues­day's last bid at $31,550 and stain­less steel in­gre­di­ent nickel was at $26,030 a tonne from $26,600.

Alu­minium hit a high of $2,654 a tonne from $2,648 on Tues­day when it saw $2,656 a tonne, its high­est since Septem­ber 2008. The metal used in trans­port, pack­ag­ing and con­struc­tion closed at $2,629 a tonne. -Reuters

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