September 12, 2013
Copper was steady on Wednesday as prospects for improved strength in China’s economy and reduced risk of a US strike on Syria, offset concern about growing stockpiles of the metal and US plans to taper monetary stimulus. Uncertainty about next week’s US Federal Reserve meeting is keeping copper investors cautious, even though last week’s disappointing US jobs data convinced many that any stimulus withdrawal will probably be gradual.
At the same time recent upbeat economic data in China increased confidence about demand for industrial metals in the world’s largest commodities buyer. “We expect demand to pick up, but if we look at all metals, supply has increased as well,” Societe Generale analyst Robin Bhar said. “There is no concern about supply, so that is a factor that may cap the market.”
London Metal Exchange data shows copper stocks at almost 590,000 tonnes, up more than 20,000 tonnes from 565,500 tonnes in August. The trend of rising stocks is leading investors to fret that the copper market surplus is widening. Benchmark three-month copper on the London Metal Exchange closed at $7,170 a tonne, unchanged from Tuesday’s close.
Copper has risen more than 8 percent since touching three-year lows in June on mounting evidence that a slowdown in China may be bottoming out, but is still down 9 percent for the year. Appetite for copper, seen as a risky asset, improved slightly on news that Syria accepted a Russian proposal on Tuesday to give up chemical weapons. Headline China trade data this week showed overall imports and exports in August were stronger than expected, indicating that the world’s top commodity buyer may have avoided a sharp slowdown.
On Tuesday, data showed China’s annual industrial output rose 10.4 percent in August. China accounts for about 40 percent of global copper consumption. Aluminium, untraded at the close, was bid at $1,802 tonne from $1,798 at the close on Tuesday. Nickel closed at $13,825 a tonne from $13,740 at the close on Tuesday. Chinese firms operating nickel mines in Indonesia are likely to step up plans to build nickel-pig-iron plants in the Southeast Asian country in order to continue shipping ores back home. Tin closed at $22,800 a tonne from $22,825, lead at $2,126 a tonne from $2,137, and zinc at $1,875.50 a tonne from $1,876. Courtesy Reuters
Published in ZaraiMedia.com