Copper edges down from 11-week peak after US durable goods data miss forecast

LONDON — Copper eased on Monday after US durable goods data missed forecasts, though expectations for upbeat Chinese demand and mine supply worries kept the metal underpinned near Friday’s 11-week high.

Among other base metals, lead reached its highest in nearly eight weeks and zinc moved back towards Friday’s 11-week peak as on-warrant London Metal Exchange (LME) stocks — metal not earmarked for delivery and therefore available to the market — hit their lowest in nearly a decade.

Copper remained under pressure, however.

“You could argue that the durable goods orders are playing their part in this,” Commerzbank analyst Daniel Briesemann said.

The metal is still holding near Friday’s peak of $ 5,854.50, its highest since Apr. 7, and is up nearly 5% in the year to date, supported by major outages at copper mines in Chile and Indonesia and hopes for buoyant demand.

“We’ve had some reasonably good data on the demand front out of China in terms of state power grid authorizations, better automobile production, a stable housing market,” Societe Generale analyst Robin Bhar. “At the same time you’ve had supply concerns returning.”

LME copper closed at $5,794 a ton, down 0.10% after a 1% gain in the previous session.

New orders for key US-made capital goods fell unexpectedly in May and shipments also declined, suggesting a loss of momentum in the manufacturing sector halfway through the second quarter.

LME copper inventories fell by 4,025 tons on Friday, exchange data showed, and are now down nearly 100,000 tons, or 28%, from their early May peak.

Hedge funds and money managers cut their net long position in copper futures and options by 13,552 contracts to 49,285 in the week to June 20, US Commodity Futures Trading Commission data showed on Friday.

Zinc inventories in LME warehouses fell to their lowest since early 2009 at 301,175 tons, exchange data showed, while on- warrant stocks hit their lowest since late 2007 at 81,150 tons.

LME zinc closed 0.60% up at $2,719 a ton, off Friday’s peak of $2,747, its highest since April 7. Lead ended the day 1.10% up at $2,255, having earlier hit its highest since May 3 at $2,258.50.

The discount of the cash contract in LME zinc over the three- month contract has narrowed to zero, exchange data showed, suggesting a tighter LME market.

LME aluminum finished 0.20% down at $1,862 a ton, while tin closed with a 0.30% gain at $ 19,290 and nickel slipped by 0.50% to $9,035. —