Copper price steadyComment on this story
London - Copper was little changed on Monday as investors waited for more confirmation of improved economic trends in the US, Europe and China, and remained mindful that supplies look set to grow strongly this year.
Underpinning the metal, the head of China's sovereign wealth fund said on Saturday that China's economy, which grew at 7.9 percent in the fourth quarter, could pick up pace to more than 8 percent in 2013.
China accounts for 40 percent of refined copper consumption.
“Generally data this year have been positive through the key regions China, the US and Europe, but copper will start underperforming this year, reflecting the idea that the market is on the cusp of moving from deficit to surplus,” said BNP Paribas analyst Stephen Briggs.
“My price forecast is for copper at $7,825 a tonne (on average) but I have a first quarter forecast at $8,275 a tonne and at this rate we're going to be lucky to make that.”
Three-month copper on the London Metal Exchange CMCU3 was little changed at $8,040.75 a tonne by 12:01 SA time from $8,030 at the close on Friday, when it fell by a third of a percent to close little changed on the week.
Prices are seen treading the year's well worn range of $7,920-$8,250 a tonne until after Lunar New Year in mid-February when Chinese consumers return to the market.
SOLID STARTS BUT SLIM CONVICTION
Investor sentiment rose strongly on Friday after data showed European banks would repay more than expected of the emergency loans they borrowed from the European Central Bank (ECB) and that business sentiment in Germany was improving sharply.
A solid start to the corporate earnings season has also helped send many equity indexes to pre-financial crisis highs.
However, the main focus for investors this week will be on the US, where the Federal Reserve's Open Market Committee meets on Tuesday and Wednesday, and where the nonfarm payrolls report is due out on Friday.
Also on the data calendar is China's official purchasing manager's index (PMI) and HSBC's final PMI for January, which are expected to show a gathering uptick in activity in the world's No.2 economy.
“Generally the consensus is that China's manufacturing sector should continue to show improvement - we're expecting a heavy volume of indicators towards the end of the week,” Credit Suisse analyst Ivan Szpakowski said.
Hedge funds and money managers increased the size of their net longs in futures and options of gold, silver and copper last week on signs of continued improvement in the US economy, Commodity Futures Trading Commission data showed on Friday.
But copper length increased by a relatively small net 270 contracts to 16,438 contracts, evidence of slim investor conviction on the metal.
“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,” said Barclays in a research note.
China's markets will be closed from February 11 to February 15.
Soldering metal tin was down at $24,525 a tonne from $24,700, while zinc, used in galvanising was up slightly at $2,084 a tonne from $2,080.
Battery material lead was at $2,370 a tonne from $2,355, aluminium was at $2,049.25 a tonne from $2,046, while stainless-steel ingredient nickel was at $17,449 a tonne from $17,380. - Reuters