Reuters: Market News: METALS-Copper dips; focus on U.S. durable goods

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METALS-Copper dips; focus on U.S. durable goods Mar 28th 2012, 10:10 Wed Mar 28, 2012 6:10am EDT * China copper appetite remains weak -JX Nippon Mining * Nickel prices hit by expectations of supply glut * Zinc warehouse stocks at multi-year peak * Coming up: U.S. durable goods at 1230 GMT By Veronica Brown LONDON, March 28 (Reuters) - Copper fell on Wednesday as bullish momentum petered out and investors shifted attention to U.S. manufacturing data for insight on the pace of recovery in the world's biggest economy. Copper had rallied about 2 percent on Monday and extended gains to a one-week high of $8,585 on Tuesday as investors interpreted comments from U.S. Federal Reserve President Ben Bernanke as hinting at further monetary easing. The drive higher was knocked back, however, by concern about slowing growth in China, the world's leading consumer of metals. "Copper is stuck in no-man's land at the moment, so the (U.S.) durable goods data will be worth watching," Standard Bank metals analyst Leon Westgate said. "The physical market is pretty moribund. You've had premiums pick up in Europe because everyone put all their eggs in one basket and shipped all their metal off to China. Metal is backing up in bonded warehouses in Shanghai, with no real physical demand at all. So you are stuck with a stalemate," he added. Three-month copper on the London Metal Exchange dropped 1 percent to $8,447 a tonne by 1032 GMT. Prices have gained more than 11 percent this year, but have been stuck in a $8,100-$8,800 range since late January. U.S. durable goods for February are due at 1230 GMT and seen growing by 3.0 percent. Wider markets were also focusing on the data after Bernanke upped the ante on recovery by saying U.S. consumer spending is still too weak to ensure a healthy pace of economic growth. European shares opened lower, while core government bonds rose and oil prices dropped almost 1 percent. After saying on Monday that accommodative monetary policy would stay in place to support demand and drive down long-term unemployment, Ben Bernanke told ABC news on Tuesday that the Fed has not taken any options off the table and needs to be prepared to respond to however the U.S. economy evolves. "U.S. macro numbers seem to be topping out a bit. We seem to have lost some of this really good momentum we had earlier in the year - the slowdown in other countries and energy prices is taking its toll," metals analyst Edward Meir at INTL FCStone said. BULGING CHINA STOCKPILES Copper stockpiles continued to mount in top consumer China, with a pick-up in consumption not seen until after May. JX Nippon Mining and Metals Corp, the parent of Japan's top copper smelter, said on Tuesday the appetite for copper in China remained weak, weighed down by swollen inventories and tight monetary policy, with destocking likely to continue until after May. China also holds more than 1 million tonnes of commercial stocks of refined copper cathode currently, a level last seen in 2009, due to high imports and weak domestic demand, which may slow arrivals in the second quarter, analysts said. In other metals, zinc stocks in warehouses monitored by the London Metal Exchange (LME) jumped to the highest in nearly 17 years on Wednesday, climbing steadily after years of market surpluses. LME stocks of zinc , a metal used to galvanise steel, jumped by 9,850 tonnes to 898,675 tonnes, latest LME data showed, which was the highest since May 1995, metals strategists at Bank of America-Merrill Lynch and BNP Paribas said. "The zinc market has been in a very large surplus for several years now and is looking at another surplus this year. Stocks are generally continuing to build up from already massive levels," metals strategist Stephen Briggs of BNP Paribas said. Three-month zinc was down 0.9 percent at $2,017 from $2,034 at the close on Tuesday. Nickel was almost steady at $17,826 a tonne after hitting a 2012 trough on Tuesday at $17,779 on prospects of a supply glut. The global nickel market was in supply surplus by 7,100 tonnes in January 2012, the latest monthly bulletin from Lisbon-based International Nickel Study Group (INSG) showed. In early October, the INSG forecast a 70,000-tonne surplus for 2012, much wider than the 2011 surplus of 19,300 tonnes. "Nickel is starting to look interesting as prices below $18,000 should begin to see a supply side response from some of the higher cost NPI (nickel pig iron) producers in China," RBC Capital said in a note. Nickel pig iron is a low nickel content substitute for refined nickel in stainless steel, and less pig iron production translates into more demand for refined nickel. Metal Prices at 1039 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct move COMEX Cu 384.30 -3.70 -0.95 444.70 -13.58 LME Alum 2182.25 -13.75 -0.63 2470.00 -11.65 LME Cu 8457.25 -77.75 -0.91 9600.00 -11.90 LME Lead 1980.00 -6.00 -0.30 2550.00 -22.35 LME Nickel 17825.00 40.00 +0.22 24750.00 -27.98 LME Tin 22370.00 -230.00 -1.02 26900.00 -16.84 LME Zinc 2014.00 -20.00 -0.98 2454.00 -17.93 SHFE Alu 16180.00 -70.00 -0.43 16840.00 -3.92 SHFE Cu* 60110.00 -600.00 -0.99 71850.00 -16.34 SHFE Zin 15455.00 -185.00 -1.18 19475.00 -20.64 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 Link this Share this Digg this Email Reprints

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