SINGAPORE, Apr 11: London copper was steady on Thursday, supported by growing optimism over China’s economic revival after lending surged in March, but consumers were reluctant to chase prices that hit two-week highs earlier in the week, given global oversupply.
Three-month copper on the London Metal Exchange was little changed at $7,571 a tonne by 0317 GMT, after closing down 0.66 percent in the previous session.
Prices hit their highest in almost two weeks at $7,645.25 a tonne on Tuesday, rebounding from 8-month lows marked at the start of April. But traders said they are selling into rallies. Copper is now trading in a band of $7,330 to $7,650, down more than 4 percent for the year.
The most-traded August copper contract on the Shanghai Futures Exchange slipped 0.27 percent to 55,100 yuan ($8,900) a tonne.
‘Chinese copper users are expecting their business to expand this year in a moderate way – -this is very different to last year when everybody was quite downbeat,’ said analyst Judy Zhu at Standard Chartered.
‘Still, one of the major concerns is supply, because everyone really panics when they see China exporting refined copper. That will be one of the concerns overhanging the market this year,’
China, the world’s biggest consumer of metals, usess around 40 percent of global refined supply and hopes that its recovery will grind up a gear have underpinned metals prices this year.
China’s annual economic growth is likely to have nudged higher in the first three months of 2013 over the last quarter of 2012, with fixed asset investment and factory output growth in double digits, cementing a mild rebound, according to a Reuters poll.
Also greasing the wheels of industry in China, banks extended 1.06 trillion yuan ($171.2 billion) of new local currency loans in March, sharply up from the previous month, central bank data showed.
In the United States, commodities prices were hurt by news that Federal Reserve officials appeared on course last month to end their extraordinary bond buying stimulus by year-end, before March’s weak labour market report, Credit Suisse said in a note.
‘U.S. Retail sales numbers are due and a robust number would be needed to improve sentiment,’ it added.
Retail sales for March are due on Friday.
MARKETS NEWS
Chinese imports of key commodities rebounded in March from the month before as hopes of a strengthening economy encouraged end-users to ramp up output and cautiously replenish stocks.
China’s March copper arrivals rose 7.2 percent from a month earlier on hopes factories would resume output after the Lunar New Year break, but fell by a sharp 30 percent from a year ago, indicating the pickup in demand was not as strong as expected.
China’s hunger for imports has slowed as its own production ramps up, with output expected to grow after the closure of India’s top smelter increased concentrate avaialble in global markets.
The world’s top consumer has also exported some of its surplus. Latest data showed exports of refined copper jumped to 64,781 tonnes for the first two months of the year, up from 753 tonnes from the same period a year earlier.(agencies)
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