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METALS-Surging stocks push zinc to 10-week low, copper rebounds

(Updates throughout, moves dateline from BEIJING)

LONDON, March 6 (Reuters) - Copper prices rose by the most in almost a month on Tuesday, helped by a weaker dollar and expectations of strong demand in China, while zinc touched its lowest since December after an increase in stocks calmed fears about availability.

Benchmark copper on the London Metal Exchange was 0.9 percent higher at $6,970.50 a tonne at 1109 GMT, up from a three-week low on Monday and on track for the biggest gain since Feb. 14.

"The long-term view on copper is still very positive," said ABN AMRO analyst Casper Burgering. "Demand will remain sound and we expect some shortages in the second quarter."

Burgering said the metal, used in power and construction, would likely finish the year around $7,100-$7,150 a tonne. In December it touched a four-year high of $7,312.50.

COPPER TECHNICALS: Copper was struggling to rise above its technically important 100-day moving average at $6,968.

CHINA ECONOMY: Data in the next few weeks in China, the world's biggest metals consumer, is expected to show growth was mostly stable at the start of the year as exports picked up and factory activity remained largely resilient.

DOLLAR: The U.S. dollar weakened, helping push up dollar-denominated metals by making them cheaper for users of other currencies.

ZINC: LME zinc was up 0.9 percent at $3,324.50 a tonne after touching $3,272, the lowest since Dec. 28, following a surge in exchange inventories.

STOCKS: On-warrant stocks available to the market in LME-registered warehouses have risen by 111 percent in two days to 177,000 tonnes, reducing fears of supply shortages that drove zinc, used to galvanize steel, to a 10-1/2-year high last month.

Inventories in Shanghai Futures Exchange warehouses have also doubled to 150,000 tonnes this year. <ZN-STX-SGH>

SPREADS: The premium for cash zinc over the three-month contract fell to $3.20 from $50 late last month, signalling greater availability of metal. <MZN0-3>

POSITIONING: Investors were reducing bets on higher prices, with the net long position in LME zinc down to 5.4 percent of active contracts from 29 percent on Feb. 1, brokers Marex Spectron said.

CHINA ALUMINIUM: LME aluminium was up 0.1 percent at $2,146.50 a tonne after an official in top producer China said the country would continue to cut aluminium capacity this year.

SPREADS: The price of cash aluminium has fallen below the three-month price, suggesting that traders see ample supply. <MAL0-3>

OTHER METALS: LME nickel was up 0.6 percent at $13,510 a tonne, lead was 0.3 percent higher at $2,431.50 and tin was down 0.2 percent at $21,510.

(Additional reporting by Tom Daly; Editing by Dale Hudson)