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METALS-Copper flat as U.S. tapering concerns offset China data

Maytaal Angel
Monday, 11 Nov 2013 | 6:58 AM ET

* Tapering fears grow after strong U.S. payrolls report

* Markets await result of key China Communist Party meeting

* Copper specs slash net longs by 13,018 lots -CFTC

LONDON, Nov 11 (Reuters) - Copper was flat on Monday after last week's one percent fall, with a pick-up in factory output in China offset by heightened concerns that the U.S. Federal Reserve will start reducing stimulus as soon as next month.

Also keeping the metal in check, China's Communist Party leaders gathered at the weekend for a landmark conclave, due to end on Tuesday, that will set the economic agenda for the next decade.

"We've got better Chinese data but better U.S. data brings with it the issue of tapering and a stronger dollar. We see prices around current levels or maybe lower through to the year-end," said Citi analyst David Wilson.

Three-month copper on the London Metal Exchange dipped 0.09 percent to $7,161 a tonne by 1126 GMT. A Veterans Day holiday in the United States and armistice remembrance holidays in several European countries, added to the quiet tone in markets.

Copper prices fell one percent last week, its biggest weekly fall since mid-September, but remained in a $7,000-7,420 band that has held since early August.

U.S. employers took on 204,000 new employees last month, data showed Friday, almost twice the number forecast by analysts. The number raised fears the Fed may soon decide to start winding down its $85 billion-a-month bond-buying programme.

In China, factory output and export data suggested the world's No. 2 economy was stabilising after a period of slower growth, though a sharp rise in the country's inflation rate fanned worries of policy tightening.

"All of the Chinese economic data published at the weekend tallied more or less with expectations, so their impact on prices is limited," said Commerzbank in a note.

China is the world's top consumer of copper, accounting for around 40 percent of refined demand. But prices have been blunted by a pick-up in supply that has helped China's factories produce record volumes of refined copper this year.

Data out earlier showed China's refined copper output reached 637,958 tonnes in October, hitting a record for the second straight month. Primary aluminium production reached 1,951,134 tonnes in October, also a record.

U.S. data on Friday showed hedge funds and money managers slashed net long or buy positions in copper by 13,018 lots to 87,689, reversing a sharp increase the previous week.

PRICES

Three month LME copper CMCU3

Most active ShFE copper SCFcv1

Three month LME aluminium CMAL3

Most active ShFE aluminium SAFcv1

Three month LME zinc CMZN3

Most active ShFE zinc SZNcv1

Three month LME lead CMPB3

Most active ShFE lead SPBcv1

Three month LME nickel CMNI3

Three month LME tin CMSN3