RTRS: METALS-Copper drifts lower as demand worries linger
* LME week draws to close, demand issues resurface
* Copper inventories jump but aluminium stocks fall
* European stocks fall after U.S. corporate updates
(Recasts, adds ring prices/detail)
By Michael Taylor
LONDON, Oct 16 (Reuters) - Copper extended losses on Friday as rising inventories and persistent worries about metals demand persisted, while U.S. corporate earnings weighed on equities.
Copper for three month delivery MCU3 on the London Metal Exchange fell to $6,180 a tonne from $6,289 at the close on Friday and compared with a session low at $6,170.
Metals analysts during London Metal Exchange Week, which brings global major metals players together in London for annual gatherings, have warned about strong prices and weak demand.
Highlighting this, LME copper inventories continued to rise, indicating demand has yet to recover outside China, the world's largest metals consumer. The latest data showed stocks rose 4,525 tonnes to total 357,850 -- their highest level since mid-May.
"In the OECD, we do have the risk that we've got lower growth, higher inflation and more economic volatility ahead," said Michael Lewis, an analyst at Deutsche Bank. "From a commodities demand perspective, on the metals side it is very much concentrated in China."
"There is (also) concern that the stimulus that we've seen and the recovery this year, is not sustainable.
For a TAKE A LOOK on LME Week, please see [ID:nL8107826]
For blogs on the event, please see: here
In other markets, European equities turned negative and Wall Street was set to open lower after earnings releases from conglomerate General Electric (GE.N: Quote, Profile, Research, Stock Buzz) and Bank of America (BAC.N: Quote, Profile, Research, Stock Buzz) disappointed. [.EU]
U.S. stocks rose overnight after Goldman Sachs Group (GS.N: Quote, Profile, Research, Stock Buzz) and Citigroup Inc's (C.N: Quote, Profile, Research, Stock Buzz) results exceeded forecasts, but failed to meet the lofty standard set on Wednesday by JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz). [.N]
A steady stream of improving macro data helped limit losses, with U.S. consumer sentiment and jobless claims data on Thursday following a surprise rise in September Chinese copper imports on Wednesday. [ID:nSP540802] [ID:nN14260181]
But a firmer U.S. currency, which makes metals priced in dollars more expensive for holders of other currencies, also weighed on industrial metals. [USD/]
Prices of copper, used in power and construction, have more than doubled this year, as a combination of Chinese stockpiling, improving economic data and new investor cash buoyed prices.
STRIKE ACTION
Labour disputes and negotiations are becoming increasingly important, as workers at Chile's Spence copper mine continued their strike, which has hurt output at the BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz) (BHP.AX: Quote, Profile, Research, Stock Buzz) unit. [ID:nN15295692]
"This may be the catalyst for any further near-term price improvement," said RBC Capital Markets in a note.
In other base metals, aluminium MAL3 traded at $1,901 in LME rings, versus $1,915. LME stocks for the metal, used in transport and packaging, shed 3,600 tonnes to maintain its steady drift away from record levels above 4.6 million tonnes.
Steel making ingredient nickel MNI3 traded at $18,675 from $18,800 while battery material lead MPB3 was untraded in LME rings but last bid at $2,194 versus $2,210.
Zinc MZN3 traded at $2,033 a tonne from $2,036 and tin MSN3 was unchanged to trade at $14,450.
Investors in tin remain concerned about supplies because of a dominant position controlling more than 90 percent of cash warrants on LME stock. [ID:nL9551738]
Metal Prices at 1220 GMT Metal Last Change Pct Move End 2008 Ytd Pct
move COMEX Cu 280.55 -4.55 -1.60 139.50 101.11 LME Alum 1885.00 -20.00 -1.05 1535.00 22.80 LME Cu 6175.00 -45.00 -0.72 3060.00 101.80 LME Lead 2190.00 -20.00 -0.90 999.00 119.22 LME Nickel 18550.00 -250.00 -1.33 11700.00 58.55 LME Tin 14285.00 -165.00 -1.14 10700.00 33.50 LME Zinc 2030.00 -6.00 -0.29 1208.00 68.05 SHFE Alu 14940.00 25.00 +0.17 11540.00 29.46 SHFE Cu* 48780.00 70.00 +0.14 23840.00 104.61 SHFE Zin 15965.00 50.00 +0.31 10120.00 57.76 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Michael Taylor; editing by Anthony Barker)
