METALS-London copper slips; Fed tapering concerns outweigh China demand

Melanie Burton
Sunday, 8 Dec 2013 | 10:42 PM ET

* China Nov copper imports up 7.1 pct on month to 435,613 T

* Speculators trim net short Comex copper position

* Coming Up: German industrial output at 1100 GMT

(Adds analyst's quotes, updates prices)

SINGAPORE, Dec 9 (Reuters) - London copper edged down on Monday, with concerns about the United States curbing its commodity-friendly stimulus as soon as this month overshadowing stronger demand signals from a step-up in monthly imports by top consumer China.

A reining in of cheap money would curb liquidity available to commodities investors as well as to industry for next year. That has prevented copper from rallying above $7,420 since June, while steady consumer appetite has lent a floor to prices at $6,900 a tonne.

"Taper timing is probably the most important thing in the very near term," said Joel Crane, analyst at Morgan Stanley in Melbourne, adding prices were likely to stay rangebound ahead of any decision.

The U.S. Federal Reserve will host its key policy meeting next week.

"Inventory of finished goods in the key copper consuming areas continues to fall while imports showed a sixth consecutive month of year-on-year increases, which confirms the restocking phase underway," said Crane, referring to China's trade data released at the weekend.

Three-month copper on the London Metal Exchange had slipped 0.3 percent to $7,100 a tonne by 0245 GMT, partially reversing the 0.8 percent gain of the previous session.

Copper prices hit $7,140.50 a tonne on Friday, the highest in almost four weeks.

The most-traded February copper contract on the Shanghai Futures Exchange edged up 0.2 percent to 50,880 yuan ($8,400) a tonne, having earlier hit 51,090, its loftiest since Nov. 12.

U.S. employers hired more workers than expected in November and the jobless rate hit a five-year low of 7.0 percent, raising the chances the Fed would start ratcheting back its bond-buying stimulus as soon as this month.

A top Fed official, who has been one of the most ardent supporters of the U.S. central bank's bond-buying stimulus program, said he was open to curtailing the purchases this month, although he would prefer to wait.

Further signs of economic stabilisation emerged from China at the weekend.

China's exports handily beat forecasts in November, adding to recent evidence of a stabilisation in the world's second-largest economy as its leaders embark on an ambitious restructuring plan.

China's imports of copper rose 7.1 percent to 435,613 tonnes in November from 406,708 tonnes in the previous month, data from the General Administration of Customs showed.

Investors remain bearish on copper, but have started to close out positions ahead of the year-end.

Hedge funds and money managers trimmed the market's short position in copper by 422 contracts to a net short of 19,316, data by the Commodity Futures Trading Commission showed on Friday.


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 = 6.0817 Chinese yuan)

(Editing by Joseph Radford and Muralikumar Anantharaman)