SINGAPORE, Apr 12: London copper eased on Friday but was set to log its first weekly gain in four on modest seasonal demand strength in top consumer China, though gains were capped by fitful growth prospects for the economies of Europe and the United States.
Three-month copper on the London Metal Exchange had slipped 0.20 percent to $7,595 a tonne by 0306 GMT, paring small gains in the previous session.
Having failed to gather upside traction after hitting a two-week high near $7,650 a tonne this week, prices are drifting down and are not very far from eight-month lows of $7,331.25 hit on April 4. Prices were set to close the week up by more than 2 percent.
The most-traded August copper contract on the Shanghai Futures Exchange climbed 0.31 percent to 55,220 yuan ($8,900) a tonne.
‘The market has been pretty bearish on China, but demand is actually not so bad,’ said analyst Bonnie Liu of Macquarie in Shanghai.
‘In the second half, there will be more supply pressure, but at least for the short term demand should hold. People talk about even stronger GDP for the second quarter,’ she said.
China’s first-quarter gross domestic product, retail sales and industrial output for March are due on April 15.
The country’s annual rate of economic growth likely nudged higher in the first three months of 2013 versus the last quarter of 2012, with fixed asset investment and factory output growth in double digits cementing a mild rebound, according to a Reuters poll.
Also adding to evidence ample credit was greasing a recovery, Chinese banks made 1.06 trillion yuan ($171.2 billion) of new local currency loans in March.
Salving concerns about the U.S. Labour market, the number of Americans filing new claims for unemployment benefits fell more than expected last week, easing fears of a marked deterioration in labour market conditions.
Still, this year now looks unlikely to deliver much improvement in the world economy’s growth rate, with a weaker outlook for Europe and the United States tempering the cautious optimism that was evident in January.
STERLITE COURT DECISION
An Indian fast-track environmental court hearing is due on Friday over the closure of the country’s largest copper smelter, run by Sterlite Industries Ltd.
The closure has already pushed up premiums to get metal in Asia while shipments of concentrate that are not needed due to the shutting have been rerouted to China, helping the world’s top consumer boost its second quarter output and curbing its demand for refined metal.
But participants at this week’s copper conference in Chile expect the bout of tightness in copper supply to prove short-lived, one trader said.
‘Producers are unsurprisingly excited about the strength in copper premiums of late, but think the market is actually not that tight,’ he said.
‘They will likely have metal to sell for balance of year, and there is still plenty of metal in bond in Shanghai at the right price,’ he said.
Premiums to get metal in bond in China’s Yangshan port were trading between $110-$120 on Friday, unchanged on the day, but up from around $70 in mid-March, according to information provider SMM.
(agencies)
Follow our WhatsApp channel