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Monthly Archives: January 2012

Copper Climbs Most in a Week on Record-High Shipments of Metal Into China

Copper Climbs Most in a Week on Record-High Shipments of Metal Into China

Copper rose the most in a week in New York as imports of the metal into China, the world’s biggest consumer, advanced for a seventh month to a record.

Chinese imports of unwrought copper and products gained 13 percent on the month in December to 508,942 metric tons, customs figures showed today. Copper also climbed as the benchmark Shanghai Composite Index of stocks rallied on optimism Chinese officials may loosen monetary policy in an effort to spur economic growth.

The increase in imports is “a positive,” Walter de Wet, head of commodities research at Standard Bank Plc in London, said by phone. “It’s largely a function of the arbitrage that’s been open,” he said, referring to buyers capitalizing on gaps between copper prices in London and Shanghai.

Copper for March delivery advanced 2.6 percent to $3.506 a pound by 8:38 a.m. on the Comex in New York. Prices gained as much as 3 percent, the most since Jan. 3. Copper for delivery in three months rose 3 percent to $7,720 a ton on the London Metal Exchange.

Annual shipments of the metal into China dropped 5.1 percent to 4.07 million tons last year, the first decline since 2008, customs data showed.

Policy makers in the Asian country will probably ease real- estate curbs as early as the middle of the year to prevent a collapse of the housing market, according to UBS AG. Construction generates a quarter of demand for copper, used in pipes and wiring, the Copper Development Association says.

Interest Rates

“There is still a lot of concern over tight monetary policy” in China, de Wet said. Copper “fabricators still have difficulty financing metal and stockpiling metal. Monetary policy should ease substantially before metal demand will pick up” in the country.

Aluminum for three-month delivery on the LME rose 2.1 percent to $2,153 a ton. Global demand for the lightweight metal will gain 7 percent this year, slowing from last year’s 10 percent, and will exceed supply by 600,000 tons, Alcoa Inc. (AA), the world’s third-biggest producer, said yesterday as it reported a fourth-quarter loss.

Alcoa also said it will curtail production at smelters in Italy and Spain as part of a plan to cut its global smelting capacity by 12 percent. More than 50 percent of world smelting capacity is cash-negative at about $2,000 a ton, according to Royal Bank of Scotland Group Plc.

“The recent cutback news and a pickup in warrant cancellations underpinned aluminum,” William Adams, head of research at Basemetals.com, said in a report today. Orders to draw the metal from LME warehouses, or canceled warrants, jumped 15 percent to a record 744,925 tons yesterday.

Zinc, lead, nickel and tin climbed in London. All four metals are also probably finding support on prospects for production curbs because some output would be loss-making at current prices, Adams said.

Jan 10, 2012 8:39 AM ET

Copper at 3-week high on fund flows, China data

Copper at 3-week high on fund flows, China data

 By Maytaal Angel
 
 Copper hit a three-week high on Tuesday,
lifted by fund allocations at the start of the year and by an expansion in
China's manufacturing activity, which boosted hopes that demand for industrial
metals will increase.
    Gains were kept in check, however, as Europe's debt crisis remains
unresolved, clouding the outlook for the global economy and for metals demand
this year.
    Three-month copper on the London Metal Exchange rose 0.78 percent to
$7,659.25 a tonne by 1048 GMT from $7,600, having earlier hit its highest since
Dec. 12 at $7,703. Volumes were extremely low at around 3,400 lots, compared
with a usual 6,000 lots by mid-morning.
    The metal, used in power and construction, posted its first annual decline
in three years in 2011 when it lost a fifth of its value on fears related to the
euro zone debt crisis and the global economic slowdown. 
    "Funds are now investing again, taking a bit more risk after a poor year,
and this is supporting the base metals. (China data) is of course also a
supporting factor," said Quantitative Commodity Research analyst Peter Fertig.
    He added, however, that the outlook is shaky. "It will depend on whether the
debt crisis calms down or whether investors remains jittery, (which) would be
negative for metals."
    China's official purchasing managers' index (PMI) rose to 50.3 in December
from 49 in November, indicating a slight expansion in business activity in the
factory sector, but downward risks persist. 
    In the wider markets, European shares, seen by some as a proxy for growth,
rose for a fourth consecutive session while the euro was up versus the dollar,
making dollar-priced commodities cheaper for European investors.   
    "China's PMI number looks positive, better than most people had expected
earlier on," said Huang Yiping, chief economist for emerging Asia at Barclays
Capital in Hong Kong. 
    "But caution remains in the market. The euro zone economy is declining, it's
in negative growth."
 
   
    Also aiding copper, workers at Freeport McMoran Copper & Gold Inc's
Indonesia unit delayed their return to work at the world's second-largest copper
mine after a three-month strike over a labour dispute. 
    LME copper faces a resistance at $7,689 a tonne and only a rise
above this could open the way to $7,887, according to Reuters technical analyst
Wang Tao. 
    With trading conditions quiet, investor attention will turn to US ISM
manufacturing PMI data for December, due later in the session.   
    On Monday, a survey showed euro zone manufacturing activity declined for a
fifth consecutive month in December, although at a slightly slower rate than
November's 28-month record low, suggesting the decline would continue in the
early months of 2012. 
    In other metals traded, soldering metal tin rose 0.78 percent to
$19,350 a tonne from $19,200, having earlier hit a near 3-week high at $19,475,
while zinc, used in galvanizing, rose 0.05 percent to $1,846 from
$1,845.
    Battery material lead fell 0.60 percent to $2,021.75 from $2,034,
having earlier hit a near three week high at $2,055.75, aluminium was
flat at $2,020 while stainless-steel ingredient nickel fell 1.1 percent
to $18,444 from $18,650.
    In industry news, Rio Tinto Alcan will shut down about a third of the
production at its 438,000-tonne Alma aluminum smelter in the Canadian province
of Quebec after locking out hundreds of unionized workers in a contract dispute.

 


Tue Jan 3, 2012 11:33am GMT
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