SINGAPORE, Aug 27: London copper held in a tight range in early Asian trade on Tuesday, held back by concerns about a U.S. Economic recovery after recent softer data, although brighter signs in top metals consumer China underpinned prices.
China’s economy is showing clear signs of stabilisation, helped by policy support and some improvement in global demand, and is on track to meet the government’s 2013 growth target of 7.5 percent, the state statistics bureau said on Monday.
That demand growth would be enough to lend a floor to copper prices given that China accounts for 40 percent of global demand, but with acceleration unlikely, copper prices could struggle to cement strong gains before the end of the year, said Thomas Lam, chief economist at DMG & Partners Securities in Singapore.
‘The global economy is moving in the right direction which should be supportive for commodities demand. As we go into the end of the year, expectations are for some improvement but I don’t expect strong impetus from China,’ he added.
Three-month copper on the London Metal Exchange edged down 0.21 percent to $7,344.75 a tonne by 0207 GMT, from the previous session on Friday. London markets were closed on Monday for a bank holiday.
LME copper prices fell for the first week in four last week as a rebound spluttered. Copper prices have recovered by more than 11 percent from three-year troughs touched in late June but are still down around 7 percent this year.
The most-traded December copper contract on the Shanghai
Futures Exchange fell 0.73 percent to 52,880 yuan ($8,600) a tonne. On Monday, it hit its highest since April 15 at 53,620 yuan a tonne.
Casting a shadow over the U.S. Economy early in the third quarter, orders for long-lasting U.S. Manufactured goods recorded their biggest drop in nearly a year in July and a gauge of planned business spending on capital goods also tumbled.
Also, the Obama administration warned Congress on Monday that the United States could run out of money to pay its bills soon after mid-October if lawmakers do not move swiftly to raise a limit on government borrowing.
Elsewhere, a consortium of Chinese investors has demanded a review of a landmark $3 billion deal to produce copper in Afghanistan, the Ministry of Mines said on Monday, putting at risk one of Kabul’s greatest hopes for economic independence.
(AGENCIES)
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