Copper steady

Copper was steady, supported by glimmers of economic resilience in Japan, a drawdown in inventories of the metal, and a softer dollar, but investors were wary after wild market swings last week.

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Copper was steady on Monday, supported by glimmers of economic resilience in Japan, a drawdown in inventories of the metal, and a softer dollar, but investors were wary after wild market swings last week.

Copper for three-month delivery on the London Metal Exchange (LME) was down less than a percent at $8,860 per tonne from Friday's $8,865 close.

“The markets are taking a breath; we ran the marathon at a sprint last week,” Nick Moore, global head of commodity strategy at RBS Global Banking and Markets, said. “Markets are in limbo with a slightly positive tone. The uncertainty is still there, and we're still watching the politicians.”

Last week, copper posted its first back-to-back weekly fall since early June on fears about the global economy and growth prospects in China, which accounts for nearly 40 percent of total copper demand estimated at around 119 million tonnes this year.

“Reports of a slowdown in China rail investments, a cut in the number of public homes China will construct and tightening measures are some of the worries that are impacting sentiment for base metals,” ANZ analysts said in a note.

Data on Monday showed Japan's economy shrank less than expected in April-June following the earthquake and tsunami in March, boosting Japan's Nikkei index 1.37 percent. Japan accounts for 5 percent of world copper demand.

In another thumbs-up for copper, inventories of the metal used in power and construction in LME-monitored warehouses fell 1,175 tonnes.

“During what is a normally a weaker month for copper (demand) the LME inventories have not been rising, that's certainly something,” Moore said.

He noted consumer buying of copper at current lower levels, but with uncertainty about the global economy, much of the buying was “hand to mouth”.

The dollar rose against the Swiss franc, but was still down around a quarter of a percent against a basket of major currencies. A weaker dollar makes commodities cheaper for holders of other currencies.

Tin was at off 0.3 percent at $24,625 from $24,650 at the close on Friday, when it rallied as much as 5 percent after Indonesia said it would impose a new royalty charge on all tin shipments.

Zinc , used in galvanising, was at $2,172 from $2,177 at Friday's close. Battery material lead was at $2,353 from $2,380 and aluminium

was at $2,386 from $2,400. Nickel was at $21,321 from $21,400. - I-Net Bridge

Source: http://www.iol.co.za/copper-steady-1.1117876

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