LONDON, Sept 24 (Reuters) - Copper inched closer to the
psychological $8,000 a tonne level on Friday, as a weak dollar
and seasonally strong fourth-quarter demand offset mixed
economic data in the United States.
Benchmark copper CMCU3 on the London Metal Exchange closed
at $7,945 a tonne from a close of $7,885 on Thursday. Copper,
used in power and construction, earlier hit a new five-month
peak at $7,990 a tonne.
Copper gained late on Friday, after a drop in U.S. durable
goods orders, seen as a key indicator of manufacturing, hurt
demand for the dollar. [ID:nN23141647]
A weak U.S. currency makes metals priced in dollars less
expensive for holders of other currencies. .DXY [FRX/]
"It shows a mixed picture that we've been alerted to," said
Robin Bhar, analyst at Credit Agricole. "Growth is faltering --
it is very mixed -- and that will be the trend that we continue
to see."
U.S. homes sales numbers were unchanged. [ID:nCLAOKE64U]
"An all-time high (in copper) won't be this year but
certainly early next," added Bhar on copper. "$8,000 -- we'll
see that push through."
A break above $8,043.75 would open the way to prices last
seen in August 2008.
Aluminium, CMAL3, zinc CMZN3 and lead CMPB3 all
climbed to new highs in around five months, while tin CMSN3
touched $23,950, its highest since May 2008.
But volumes were slender, with the world's top metals
consumer China on holiday for the Mid-Autumn Festival. It will
only reopen on Monday and national holidays resume on Oct. 1-7.
"The rally is obviously the weakness of the dollar, and the
prospect of quantitative easing and the flood of money looking
for a home," said analyst Stephen Briggs of BNP Paribas.
"It's [also] to do with sentiment....This is all about the
perception that the market will become tight in the future."
COPPER SUPPLY TIGHTNESS?
Copper stocks in LME warehouses rose by a scant 100 tonnes,
to 380,225 tonnes, the latest LME data showed, but as a general
trend have been in decline, falling counter cycle over summer.
They have dropped by around one third since February, when
stocks stood at 555,075 tonnes, the highest level since October
2003. [0#LME-STOCKS]
"The way that the fundamentals are shaping up for copper are
very positive," said Gayle Berry, analyst at Barclays Capital.
"The market has seen sustained stock draws during the summer,
when you usually expect to see stocks increase.
"Raw material supply constraints are still severe, and there
is potential for a further pick-up in Chinese buying, given that
during the summer months, it looks as though they de-stocked."
The market is already seeing pressure this year, with global
demand outpacing supply. The International Copper Study Group
said this week that the global market for refined copper was in
a 281,000 tonne deficit in the first half. [ID:nLDE68K12C]
Aluminium CMAL3 ended at $2,317 a tonne from $2,292,
having reached $2,336.25 earlier, a new five-month peak.
Lead CMPB3 closed at $2,296 versus Thursday's $2,275
close. It touched $2,321 earlier its highest since late April.
Zinc CMZN3 ended at $2,248 against a final bid at $2,250
on Thursday, having earlier hit its most expensive since early
May at $2,284.75. Steel ingredient nickel MNI3 closed at
$22,875 from a last bid at $22,700 on Thursday -- below last
week's multi-month highs above $23,570.
Tin MSN3 ended unchanged at $23,600, on the back of
ongoing supply constraints from Indonesia. [ID:nJAK60863].
Barclays expects mining supply constraints to push tin and
copper to new annual average peaks next year. [ID:LDE68M1TG]
Metal Prices at 1607 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in
yuan/T
Metal Last Change Pct Move End 2009 Ytd Pct
move
COMEX Cu 361.60 3.10 +0.86 334.65 8.05
LME Alum 2317.50 25.50 +1.11 2230.00 3.92
LME Cu 7930.00 45.00 +0.57 7375.00 7.53
LME Lead 2285.00 10.00 +0.44 2432.00 -6.04
LME Nickel 22840.00 280.00 +1.24 18525.00 23.29
LME Tin 23550.00 -50.00 -0.21 16950.00 38.94
LME Zinc 2244.00 52.00 +2.37 2560.00 -12.34
SHFE Alu 15725.00 -35.00 -0.22 17160.00 -8.36
SHFE Cu* 59830.00 -420.00 -0.70 59900.00 -0.12
SHFE Zin 17805.00 -300.00 -1.66 21195.00 -15.99
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
(Source: Reuters, By Melanie Burton and Michael Taylor)
SHFE ZN began trading on 26/3/07
