Copper hits 3-week low

Comment on this story


CopperMine

REUTERS

London - Copper hit a three week low on Tuesday depressed by unease over top consumer China's limp return to the market from a week-long holiday, though losses were limited by better than expected German investor sentiment data.

Three-month copper on the London Metal Exchange traded down 0.36 percent to $8,090 a tonne by 12:48 SA time.

Prices erased early gains to hit $8,084 a tonne earlier, which was the lowest since January 29.

Copper prices have built a base above $8,000 this year but have failed to find traction above $8,346 a tonne, a four-month peak hit early this month.

Volumes were expected to pick up Tuesday as US traders return from the Presidents' Day holiday.

Weighing on the metal, Chinese traders reported low overall post-holiday interest, though some purchases had been completed, pushing the price gap between Shanghai and London cash copper down to $80 from about $200 pre-holiday.

China consumes about 40 percent of the world's copper.

“We need to see more substance in terms of underlying demand if the run up in prices is to be sustained. All eyes were on the

return of the Chinese. It's still early to say but yes it's been a no show so far,” said Macquarie analyst Duncan Hobbs.

“Also there are reports circulating that the Chinese government may start to tighten (monetary policy).”

Limiting falls in copper however was data showing better-than-expected ZEW economic sentiment in Germany, Europe's biggest economy.

The data helped push European shares higher and sent the dollar down to a session low versus the euro.

The dollar remained strong overall though, with the euro still hurt by Monday's comments from the central bank about the impact of its recent appreciation.

A stronger dollar makes dollar-priced metals costlier for European and other non-US investors.

“Over the balance of this week, we could see the softer tone in metals remain in place ... in view of the fact that the more

recent macro numbers coming out of the US and Europe have turned somewhat soggier,” INTL FCStone said.

“We have yet to see the Japanese economy recovering in any significant fashion, and while China's growth is ramping up, it is largely on account of over reliance on a dominant government sector,” it said in a note.

Data out last week showed US manufacturing got off to a weak start this year, though there were signs the decline would be temporary. In Europe meanwhile, euro zone growth data for the fourth quarter was poorer than expected.

In Asia traders had hopes that post-holiday buying might yet resume, even if it has been poor so far.

“A lot of Chinese guys are still out. We might get a bit more action when Chinese New Year officially finishes with the Lantern Festival on the 24th,” said a Singapore-based trader.

In other metals traded, soldering metal tin fell 1.95 percent to $24,775 a tonne, having earlier hit its lowest since Jan 7 at $23,750; while zinc, used in galvanising, fell 0.56 percent to $2,143.50, having earlier hit its lowest since February 1 at $2,141.50.

Battery material lead fell 0.65 percent to $2,374 a tonne, aluminium eased 0.15 percent to $2,113.75, while stainless-steel ingredient nickel fell 1.27 percent to $17,628, having earlier hit its lowest since Jan 29 at $17,620. - Reuters


sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

     

Join us on

IOL-Social networks IOL-Social networks IOL-Social networks IOL-Social networks

Business Directory