METALS-Metals slip as traders book profits, but economic outlook supports

Melanie Burton
Wednesday, 15 Jan 2014 | 3:12 AM ET

* World Bank raises forecast for global growth

* Japan's PPC, BHP take holiday from 2014 copper TC/RC term deals

* Coming up: Germany 2013 GDP at 0800 GMT

(Adds comment, detail; updates prices)

SYDNEY, Jan 15 (Reuters) - London copper edged down on Wednesday as traders took profits and as demand eased ahead of the Lunar New Year, but prices were buttressed by improving economic optimism after the World Bank raised its forecast for global growth.

Copper prices have been stuck in a rut so far in 2014, capped by expectations that supply will climb as the year gets underway but underpinned by a shortfall of available metal in physical markets.

"Definitely there is less demand for copper at the moment. Because of seasonal reasons, demand for all commodities is going to weaken which will be the case until early February," said analyst Wan Ling at metals consultancy CRU in Beijing.

Three-month copper on the London Metal Exchange had edged down 0.3 percent to $7,255 a tonne by 0710 GMT from the previous session when it slipped 0.7 percent.

The most-traded March copper contract on the Shanghai Futures Exchange eased 0.4 percent to end the second session at 51,450 yuan ($8,500) a tonne.

A revival in dollar fortunes spurred profit-taking across metals, traders said.

"Nickel is up $1,000 in two days, lead has rallied $100 and zinc was up $90. Last night there was no (buying) on the close so anyone that can take a quick buck is doing it," said one trader in Singapore.

China is the world's top copper consumer, accounting for around 40 percent of global refined demand. Lunar New Year holidays kick off on January 31 this year.

Pan Pacific Copper, Japan's biggest smelter, said on Wednesday it would not sign a long-term contract for copper processing fees with global miner BHP Billiton in 2014, after they couldn't agree on terms.

Pan Pacific may be betting on ample supply to fill its needs this year, given the global copper market is expected to be in a surplus, traders said.

Cash copper remained at a premium against the benchmark, signalling a shortfall of available supply, although the differential eased by more than $10 on Tuesday to $24.75 from 19-month peaks hit the day before.

Improving prospects for metals demand, the World Bank on Tuesday raised its forecast for global growth for the first time in three years as advanced economies started to pick up pace, led by the United States.

In other metals, LME nickel prices slipped 0.7 percent to $14,240 a tonne, eroding Tuesday's 1-percent gain, but still up by more than 6 percent since Thursday after Indonesia's ban on ore exports came into force at the weekend.

Chinese firms are speeding up plans to build refineries in Indonesia to produce nickel pig iron, a substitute for higher grade refined nickel in stainless steel, after the move by Jakarta.

In other news, the Fed on Tuesday took a first formal step toward restricting the role of Wall Street banks in trading physical commodities, citing fears that a multibillion-dollar disaster could bring down a bank and imperil the stability of the financial system.


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 = 6.0412 Chinese yuan)

(Reporting by Melanie Burton; Editing by Richard Pullin and Joseph Radford)