RTRS: METALS-Copper dips as dollar edges up, eyes on China
By Rebekah Curtis
LONDON, Nov 10 (Reuters) - Copper prices fell on Tuesday,
with the market taking its cue from forex markets as the dollar
edged off 5-month lows versus a basket of currencies, while
continued rises in LME stocks underlined demand concerns.
Investors were also waiting for October import data for
unwrought copper and semi-finished copper products from China,
which is expected this week, as well as copper output data.
Copper for three-months delivery MCU3 on the London Metal
Exchange traded at $6,500 a tonne at 1102 GMT from a close of
$6,540 on Monday.
"People are going to wait and see what the numbers are that
come out from China," said Charles Kernot, an analyst at
Evolution Securities.
"It was a positive surprise last month. It will be a
surprise in the other direction (this month)," he added. "A fair
amount of weakness."
Copper consumption in China, the world's top user of the
metal, usually enters a relatively quiet season in the second
half of November.
"Given the price incentive to import copper into China on an
arbitrage basis has broadly disappeared in recent months and
stocks have risen in the region...the domestic market appears
plentifully supplied," Barclays Capital said in a note.
Casting shadows over the demand outlook, LME copper
inventories have been rising since July. Stocks last climbed
4,675 tonnes to a 6-month high of 394,150 tonnes. MCU-STOCKS
Copper inventories in Shanghai rose to their highest in five and
a half years last week.
DOLLAR
Looking ahead analysts see some further weakness in the
dollar, currently hovering near 15-month lows against a basket
of six major currencies. [USD/]
Copper, used in power and construction, had rallied on
Monday as a sliding dollar made commodities priced in the U.S.
currency cheaper for non-U.S. investors.
The metal has more than doubled in value this year, driven
by hefty Chinese buying and dollar weakness.
Strong Chinese demand for copper is likely to see Codelco
raise term copper premiums to the country for next year, after
lifting them for Japanese and South Korean customers.
[ID:nT230071]
Among other industrial metals aluminium MAL3 was at $1,956
from $1,952.
Aluminium prices should remain weak into 2010, with smelters
expected to restart some idled production capacity despite a
surplus already overhanging the global market, a Bank of America
Merrill Lynch research note said. [ID:nN0983908]
Zinc MZN3 was at $2,149 from $2,160 and battery material
lead MPB3 was at $2,258 from $2,300. Tin MSN3 traded at
$14,850 from $14,750.
Prices of nickel MNI3 fell to $16,975 from $17,430. Prices
of the metal hit $16,865 a tonne, the lowest since late
September, on concern that stainless steel mills were cutting
back production.
About 60 percent of global nickel production is used by
stainless steel producers.