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METALS-Copper rises from near 1-wk low on brighter China factory data

Melanie Burton
Wednesday, 23 Oct 2013 | 11:11 PM ET

* China manufacturing picked up in Oct

* China bonded stock premiums up $2.50 to $180-205 -Shmet

* Coming up: euro zone manufacturing flash PMI at 0758 GMT

(Adds comment, detail; updates prices) SINGAPORE, Oct 24 (Reuters) - London copper climbed on Thursday from near one-week lows touched the session before, boosted by improving manufacturing growth in the world's No.1 metals consumer China. Activity in China's giant manufacturing sector picked up in October, a preliminary survey showed on Thursday, suggesting the economy may have stabilised even though a strong rebound remains elusive. But the market remains on alert for further moves from the People's Bank of China (PBOC), which held back from liquidity operations for the second day on Tuesday, fuelling concerns of a cash crunch. "The big question people are looking at now is what happens in the fourth quarter," said analyst Ivan Szpakowski of Citi in Shanghai. "Our view is that it will be slower and a lot of that is basis credit tightening since Q2 and because of that we're expecting slower growth and that does feed into our bearish copper view." Three-month copper on the London Metal Exchange was trading up 0.39 percent at $7,198.75 a tonne by 0226 GMT, after falling 2.2 percent the session before. Copper prices slid to $7,170 a tonne on Wednesday, the lowest since Oct. 14. Prices have traded in a $7,000-7,420 band since late August and remain down by more than 9 percent for the year. The most-traded January copper contract on the Shanghai Futures Exchange pared early losses to trade at 51,760 yuan ($8,500) a tonne, still down 1 percent. It earlier touched 51,590 yuan, its lowest since Oct. 14. Demand from China, has been decent but not great, added Szpakowski. "The power industry and telecoms have been relatively weak, also social housing has been down. But at the same time, private housing has been good, machinery and home appliances have been better, air con has been better this year and auto production is up significantly," he said. "(But) we think when copper does break out of the range, it's going to break lower, and that's primarily due to supply." Citi sees the global copper market surplus widening to 450,000 tonnes next year from 300,000 tonnes in 2013 as more mine supply comes on line. Reflecting a response to lower prices, premiums for bonded copper in Shanghai firmed $250 to $180-$205 according to China price provider Shmet. (http://www.shmet.com/) Elsewhere, the U.S. derivatives regulator will meet next month to adopt a rule that will curtail Wall Street's ability to speculate with commodities, a measure investment banks are fighting in court. And China will retain a ban on overseas commodity exchanges setting up warehouses there, a government source said, dashing expectations for London Metal Exchange warehouses in the newly launched Shanghai free trade zone.

Base metals prices at 0226 GMT

Metal Last Change Pct Move YTD pct chg LME Cu 7198.75 27.75 +0.39 -9.21 SHFE CU FUT JAN4 51760 -510 -0.98 -10.26 HG COPPER DEC3 3.27 0.01 +0.20 -99.10 LME Alum 1850.00 6.00 +0.33 -10.67 SHFE AL FUT JAN4 14375 -25 -0.17 -6.32 LME Zinc 1934.50 2.50 +0.13 -6.25 SHFE ZN FUT JAN4 15000 -545 -3.51 -3.51 LME Nickel 14500.00 -95.00 -0.65 -15.48 LME Lead 2171.00 -1.50 -0.07 -7.22 SHFE PB FUT 14395.00 -70.00 -0.48 -5.61 LME Tin 22825.00 25.00 +0.11 -2.46 LME/Shanghai arb^ -534

Shanghai and COMEX contracts show most active months month

PRICES Three month LME copper Most active ShFE copper Three month LME aluminium Most active ShFE aluminium Three month LME zinc Most active ShFE zinc Three month LME lead Most active ShFE lead Three month LME nickel Three month LME tin

($1 = 6.0835 Chinese yuan)

(Reporting by Melanie Burton; Editing by Joseph Radford)

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