SINGAPORE, July 9: London copper held steady on Tuesday, not far off a three-year low hit in late June, with slowing demand growth from top consumer China and expectations the United States will rein in stimulus giving little upward momentum to prices.
China’s copper consumption peaks in the second quarter with demand from factories easing over the northern summer, while economic data has given little hope for a robust recovery.
The drawback of liquidity from the United States meanwhile means less capital is available to cushion industry in the world’s biggest economy, and also that less cash is on hand for commodities investment.
‘There’s still the ongoing concerns about Fed tapering and when that will begin. If you see more positive data out of the U.S. That brings forward the potential tapering date,’ said Alexandra Knight of National Australia Bank (NAB) in Melbourne.
U.S. Job growth was stronger than expected in June cementing expectations that the Federal Reserve may start winding down its massive stimulus program as early as September.
Three-month copper on the London Metal Exchange was little changed at $6,845 a tonne by 0315 GMT, up 0.22 percent. It logged gains of less than 1 percent in the previous session.
Copper prices have struggled to get any traction after inching away from a three-year low of $6,602 a tonne reached on June 25. Prices have gained only about 3.7 percent from there and are still down almost 14 percent for the year.
The most-traded November copper contract on the Shanghai Futures Exchange climbed 0.80 percent to 49,130 yuan ($8,000) a tonne.
China’s resolve to revamp its economy for the long-term good will be tested this month when a slew of data is expected to show growth is grinding towards a 23-year low. China trade data is due on Wednesday.
‘Generally we’re seeing data coming in below expectations and showing some softening in the Chinese economy … And that could have a significant impact on metals demand,’ Knight said.
NAB revised down its GDP forecasts for China for this year and next by 0.25 percent to 7.5 percent and 7.25 percent, respectively.
Premiums for copper in China’s bonded zones have fallen to around $180 from $210 at the end of June, according to price provider SMM, as demand for global stocks of metals recedes.(http://www.Smm.Cn/yangshan/index.Php)
PRICES
Base metals prices at 0315 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 6845.00 15.00 +0.22 -13.67
SHFE CU FUT NOV3 49130 390 +0.80 -14.82
HG COPPER SEP3 3.11 0.01 +0.18 -99.15
LME Alum 1801.50 -1.50 -0.08 -13.01
SHFE AL FUT OCT3 14270 50 +0.35 -7.01
LME Zinc 1873.00 -7.00 -0.37 -9.23
SHFE ZN FUT OCT3 14540 -1005 -6.47 -6.47
LME Nickel 13455.00 25.00 +0.19 -21.57
LME Lead 2071.00 0.00 +0.00 -11.50
SHFE PB FUT 13895.00 50.00 +0.36 -8.89
LME Tin 19408.00 -42.00 -0.22 -17.06
LME/Shanghai arb^ —
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 6.1337 Chinese yuan)
(agencies)
Follow our WhatsApp channel