SINGAPORE, Aug 6: London copper was trapped in a tight range on Tuesday with muted summer-season demand from China keeping volumes low, while investors eye the release of key trade and industrial output numbers from the top consumer later this week for direction.
Copper prices have found a floor around the $6,700 a tonne level with consistent buying emerging on dips, despite the sluggish demand that is not expected to pick up until the fourth quarter, traders and analysts said.
‘July to early September is traditionally a slack season for demand in China. Traditionally speaking, producers of copper electrical wire will start preparing for orders around Christmas and Chinese New Year and that will then give support,’ said Chunlan Li of consultancy CRU in Beijing.
Three-month copper on the London Metal Exchange traded little changed at $6,965 a tonne by 0319 GMT.
Copper finished last week up around 2 percent for its first weekly gain in three, but is down 12 percent for the year.
The most-traded November copper contract on the Shanghai Futures Exchange drifted down 0.16 percent to 50,050 yuan ($8,200) a tonne.
Market participants are now waiting to scour China trade data — due on Thursday — and inflation, urban investment, industrial output and retail sales — due on Friday — for hints on the country’s demand for commodities.
For now, copper prices are drawing some support from lower availability of scrap metal in China, traders said. Copper scrap is used as a feedstock by producers of the refined metal.
Premiums for copper in China’s bonded zone are near four-year highs of $210, and trading in a wide $185-$225 range according to Chinese price provider Shmet. (http://www.Shmet.Com/)
In other metals, immediate demand for tin has surged in the past month, pushing up LME cash prices to a $28 premium over three-month prices, the highest since November last year, from a $67 discount a month ago. <CMSN0-3>
Indonesia’s overhaul of tin trading rules that raises minimum purity levels are expected to slash shipments from the world’s top refined tin exporter for a few months, potentially pushing up prices for the metal.
Also potentially affecting metals, the U.S. Federal Reserve should reverse its policy of allowing investment banks to own metals warehouses and commodity infrastructure assets, a top U.S. derivatives regulator said on Monday.
PRICES
Base metals prices at 0319 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 6965.00 -10.00 -0.14 -12.16
SHFE CU FUT NOV3 50050 -80 -0.16 -13.23
HG COPPER SEP3 3.16 -0.01 -0.38 -99.14
LME Alum 1798.00 -2.00 -0.11 -13.18
SHFE AL FUT NOV3 14235 -20 -0.14 -7.23
LME Zinc 1863.00 -6.00 -0.32 -9.72
SHFE ZN FUT NOV3 14580 -965 -6.21 -6.21
LME Nickel 13855.00 -20.00 -0.14 -19.24
LME Lead 2116.25 -5.75 -0.27 -9.56
SHFE PB FUT 14005.00 10.00 +0.07 -8.16
LME Tin 21150.00 -75.00 -0.35 -9.62
LME/Shanghai arb^ -363
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 6.1247 Chinese yuan)
(agencies)
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