Weaker dollar boosts copper prices
Copper rose to its highest in three weeks on Friday, reversing losses in the previous session, as a weaker dollar boosted prices. Three-month copper on the London Metal Exchange CMCU3 traded at $9,213 tonne at 1243 GMT, from Thursday’s close of $9,020. The metal hit $9,238, its highest since May 4, as the euro climbed to a session high against the dollar. However copper prices were on track for a third monthly loss. “It’s very much dollar and risk sentiment (driving prices),” Danske Bank analyst Christin Tuxen said. She said economic data due next week, an indicator for global growth, would be a key driver for base metals prices. “It’s going to be very much a struggle between currency movements and economic data which we expect will fade.”The euro climbed to a session peak versus the dollar after European Central Bank Governing Council member George Provopoulos said that Greece can handle its debt if it sticks to its aid programme. [FRX/] [ID:nFAT007211].
In the United States, U.S. consumer spending rose less than expected in April as high gasoline prices continued to squeeze household budgets, in government data which also showed annual inflation at its fastest pace in a year. [ID:nN27296561]
In top consumer China, copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 8.7 percent from last Friday, the exchange said. [ID:nL3E7GR109]
The United States and Britain will be on holiday on Monday. “Given the pending long weekend it is likely the focus today will be more on book squaring, and window dressing ahead of month-end Tuesday,” FastMarkets said in a note.
“The failure to make significant upside progress and cement a technical upside break-out could also be the catalyst for further price pressure in the short-term as some view the recent gains as merely a dead-cat bounce.”
In France, G8 leaders agreed that the global economy recovery was becoming more “self-sustained”, although higher commodity prices were hampering further growth. ID:nLDE74Q0CZ]
PROTEST IN CHILE
In producer Chile, thousands of contract workers at El Teniente mine downed tools for a second day on Thursday in a peaceful wage protest that is not hurting output but has stoked fears of violence. [ID:nN26241704]
A study on warehousing commissioned by the LME recommends the loadout rate should be set “well above” the present minimum of 1,500 tonnes per warehousing company, per location, and that these rates be reviewed every six months. [ID:nLDE74Q114]
Inventories of copper MCU-STOCKS in LME warehouses rose 1,250 tonnes to 469,475 tonnes, data showed. Copper stocks are more than 30 percent higher than in early December.
Bloomsbury Minerals Economics said current pessimism regarding copper was “overdone”.
“Recent drawdown of stocks, moribund supply growth and reports of healthier fabricating business combine to indicate that in April-May the physical fundamentals for copper are in good shape, despite modest demand growth in China due to tighter credit,” it said in a note.
“In coming months, a release of the brakes in China should offset the arrival of the Northern Hemisphere summer slowdown, ensuring that refined copper consumption at least remains flat in Q3 before rising again in Q4 2011.”
If this happens, demand should continue to run well ahead of supply for the remainder of 2011 and into 2012, it added.
LME aluminium stocks fell 3,275 tonnes to 4,702,825 tonnes, off a record high of 4.71 million tonnes. MAL-STOCKS Aluminium CMAL3 traded at $2,605 a tonne — after hitting a two-week high of $2,616 — from $2,562.5.
Tin CMSN3 traded at $27,500 from $26,900 a tonne while zinc CMZN3 traded at $2,281 from $2,260. Battery material lead CMPB3 was at $2,523 from $2,491 a tonne and nickel CMNI3 traded at $23,249 from $22,825 a tonne.
In the United States, U.S. consumer spending rose less than expected in April as high gasoline prices continued to squeeze household budgets, in government data which also showed annual inflation at its fastest pace in a year. [ID:nN27296561]
In top consumer China, copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 8.7 percent from last Friday, the exchange said. [ID:nL3E7GR109]
The United States and Britain will be on holiday on Monday. “Given the pending long weekend it is likely the focus today will be more on book squaring, and window dressing ahead of month-end Tuesday,” FastMarkets said in a note.
“The failure to make significant upside progress and cement a technical upside break-out could also be the catalyst for further price pressure in the short-term as some view the recent gains as merely a dead-cat bounce.”
In France, G8 leaders agreed that the global economy recovery was becoming more “self-sustained”, although higher commodity prices were hampering further growth. ID:nLDE74Q0CZ]
PROTEST IN CHILE
In producer Chile, thousands of contract workers at El Teniente mine downed tools for a second day on Thursday in a peaceful wage protest that is not hurting output but has stoked fears of violence. [ID:nN26241704]
A study on warehousing commissioned by the LME recommends the loadout rate should be set “well above” the present minimum of 1,500 tonnes per warehousing company, per location, and that these rates be reviewed every six months. [ID:nLDE74Q114]
Inventories of copper MCU-STOCKS in LME warehouses rose 1,250 tonnes to 469,475 tonnes, data showed. Copper stocks are more than 30 percent higher than in early December.
Bloomsbury Minerals Economics said current pessimism regarding copper was “overdone”.
“Recent drawdown of stocks, moribund supply growth and reports of healthier fabricating business combine to indicate that in April-May the physical fundamentals for copper are in good shape, despite modest demand growth in China due to tighter credit,” it said in a note.
“In coming months, a release of the brakes in China should offset the arrival of the Northern Hemisphere summer slowdown, ensuring that refined copper consumption at least remains flat in Q3 before rising again in Q4 2011.”
If this happens, demand should continue to run well ahead of supply for the remainder of 2011 and into 2012, it added.
LME aluminium stocks fell 3,275 tonnes to 4,702,825 tonnes, off a record high of 4.71 million tonnes. MAL-STOCKS Aluminium CMAL3 traded at $2,605 a tonne — after hitting a two-week high of $2,616 — from $2,562.5.
Tin CMSN3 traded at $27,500 from $26,900 a tonne while zinc CMZN3 traded at $2,281 from $2,260. Battery material lead CMPB3 was at $2,523 from $2,491 a tonne and nickel CMNI3 traded at $23,249 from $22,825 a tonne.
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