METALS-Copper reverses gains as mine output rises
* ECB's Draghi expects euro zone recovery this year * Brighter outlook boosts equities, oil * U.S. new home sales fall, but housing recovery still on track By Susan Thomas LONDON, Jan 25 (Reuters) - Copper fell on Friday as reports of higher production at the world's third-largest miner of the metal offset a soft dollar and signs of recovery in the United States, Europe and China. Data showing new U.S. single-family home sales fell in December also weighed on copper, although the housing recovery still appears to be on track. Construction is a significant market for copper with a little over 400lbs of copper used in a typical U.S. home. Anglo American's Chilean Collahuasi mine posted a better than expected rise in production to 172,900 tonnes, up 2 percent year-on-year. Three-month copper on the London Metal Exchange closed at $8,030 a tonne, reversing earlier gains that took it close to a two-week high. It finished the previous session at $8,095.5. "It's been pretty choppy trading, but not showing signs of any kind of collapse so we're reasonably positive for the first quarter," BNP Paribas analyst Stephen Briggs said. "Base metals have under-performed stock markets. We've had a generally strong risk-on start to the year which has done a lot for stock markets. In comparison with that base metals have been pretty tepid, so there is potential for catch-up given that underperformance." Copper has been caught in a band of $7,920 to $8,250 a tonne so far this year, after an early January rally to 2-1/2 month highs fizzled out. The broad Standard and Poor's 500 stock market index is up more than 5 percent so far this year, compared with LME benchmark copper, which has risen around 2 percent. "Investor conviction towards base metals remains muted with a focus on how conditions evolve post the New Year's holiday in China as critical to performance," Barclays said in a research note. China's markets will be closed from Feb. 11 to Feb. 15 for the Lunar New Year. Barclays also said Chinese metals data for December continued to point towards a trend of constrained metal imports and strong domestic metal output. "Base metal prices have largely remained range bound over the past week, as the tension between macro and micro factors continues to limit any sustained periods of directional trend," the Barclays note said. "Indeed, a series of meetings both in London and New York have largely provided us with evidence that investor conviction towards the complex remains as weak as it was for much of 2012." However, manufacturing in China and the United States grew this month at the fastest pace in about two years while data suggested German growth picked up boosted hopes for the battered euro zone. European Central Bank President Mario Draghi also expects the euro zone economy to recover later this year, adding that financial market improvements have not yet trickled into the general economy. The brighter outlook lifted shares and oil prices and the euro extended a rally against the dollar. A weaker dollar usually makes commodities priced in the currency cheaper for holders of other currencies, like the euro. Q2 PICK-UP? "Data is improving in Europe and the United States and most importantly also from China, such as we saw in the steady improvement in the HSBC flash PMI yesterday," said strategist Nick Trevethan of ANZ in Singapore. "We should see a little bit of a pick-up in quarter two after the Chinese New Year, and we should start to see acceleration in demand in the second half of the year - but expect range trading in the next three weeks before then." Three-month LME aluminium closed at $2,046 per tonne from $2,076 at the close on Thursday, and tin at $24,700 from a last bid of $24,625. Three-month zinc closed at $2,080 from a last bid of $2,089, and lead at $2,355 from $2,403. Nickel, untraded at the close, was bid at $17,380 per tonne from $17,390. Metal Prices at 1712 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2012 Ytd Pct move COMEX Cu 364.25 -2.55 -0.70 365.25 -0.27 LME Alum 2049.50 -26.50 -1.28 2073.00 -1.13 LME Cu 8028.25 -67.25 -0.83 7931.00 1.23 LME Lead 2363.00 -40.00 -1.66 2330.00 1.42 LME Nickel 17347.00 -43.00 -0.25 17060.00 1.68 LME Tin 24700.00 250.00 +1.02 23400.00 5.56 LME Zinc 2080.25 27.25 +1.33 2080.00 0.01 SHFE Alu 15225.00 -5.00 -0.03 15435.00 -1.36 SHFE Cu* 58640.00 210.00 +0.36 57690.00 1.65 SHFE Zin 15635.00 165.00 +1.07 15625.00 0.06 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.