SINGAPORE, July 15: London copper steadied on Monday after data from China showed the slowdown in the world’s top consumer of most commodities was not as bad as some investors had feared, while focus shifted to U.S. Federal Reserve policy testimonials later this week.
Markets were spooked last week when China’s finance minister was reported as saying that growth could be 7 percent this year, below the target of 7.5 percent. But, the official Xinhua News Agency later corrected that report to quote the minister as saying: ‘There is no doubt that China can achieve this year’s growth target of 7.5 percent’.
The row back restored confidence that Beijing would still step in to keep growth at its target level, said analyst Sijin Cheng of Barclays Capital. ‘Now it is really more the Fed, and expectations over the time scale of tapering that is driving the market,’ she said.
U.S. Federal Reserve chief Ben Bernanke last week said the central bank would continue to pursue an accommodative monetary policy given tame inflation and a still fragile labour market.
Three-month copper on the London Metal Exchange pared early losses to trade at $6,975 a tonne by 0235 GMT, up 0.30 percent from Friday. It finished last week with gains of 2.4 percent, the biggest weekly rise since early May.
The most-traded November copper contract on the Shanghai Futures Exchange also cut early losses to trade little changed at 50,190 yuan ($8,200) a tonne.
Hopes the United States would keep its loose monetary policy for longer were shoring up metals prices, Cheng added.
‘Prices look pretty well supported. It would take a macro development that we haven’t factored in to see a repeat of the year’s lows,’ she added.
Euro zone factory output fell in May for the first time in four months, data showed on Friday, suggesting a fragile and uneven recovery in the bloc that is struggling with record joblessness.
Hedge funds and money managers trimmed net shorts in copper futures and options in the week to July 9, a report by the Commodity Futures Trading Commission showed.
(agencies)
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