METALS-Copper dips on dollar, China demand eyed

Wed Feb 13, 2013 11:20pm IST

* China markets closed for Lunar New Year holiday
    * Rio Tinto's Gove alumina refinery gets green light
    * U.S. retail sales edge up 0.1 percent in January

    By Harpreet Bhal
    LONDON, Feb 13 (Reuters) - Copper prices dipped on Wednesday as the euro
fell against the dollar and U.S. retail data disappointed investors, but losses
were limited by prospects that demand from top consumer China will start picking
up after a week-long holiday.
    Benchmark three-month copper on the London Metal Exchange closed at
$8,226 a tonne, down from a last bid of $8,236 on Tuesday. 
    Copper prices were trading about 0.4 percent lower so far for the week but
were still up 1.2 percent on the month following strong gains in early February.
    Volumes were thin on Wednesday, however, as markets in China remained closed
for the Lunar New Year holiday. Markets in Taiwan and Hong Kong were also
closed.
    In the United States, retail sales barely rose in January as tax increases
and higher gasoline prices restrained spending, suggesting the economy got
little help from consumers at the start of the year. 
    Recent data from China has fuelled optimism that the country's appetite for
metals demand could pick up following the holiday season. China accounts for
about 40 percent of global refined copper demand. 
    Last week, data showed exports and imports surged and new lending soared in
January, signalling not only a solid recovery in domestic and overseas demand,
but also risks that inflationary pressures are building. 
    "(The) numbers have yet again confirmed that the world's top industrial
economy is turning the corner as growth rates pick up after the 2Q-3Q12 lull,"
Andrey Kryuchenkov, an analyst at VTB, said.
    The dollar pared losses against a basket of currencies as the euro turned
negative against the U.S. currency ahead of a G20 meeting in Moscow this week. A
stronger dollar makes metals more expensive for holders of other currencies.
 
          
        
    ZINC GAINS
    Three-month zinc prices hit a 17-month intraday high at $2,230 a
tonne, supported by chart and momentum-based buying that drove prices higher
last week. It closed at $2,195 from $2,210 on Tuesday. 
    "Zinc ... will likely see fresh momentum buyers in the market over the
coming days," said RBC Capital in a note.
    Among other metals, aluminium closed at $2,141 from Tuesday's close
of $2,118. 
    Aluminium inventories in LME-registered warehouses rose by 4,775 tonnes,
latest data showed, bringing total stock to 5.15 million tonnes. 
    Reflecting government support to help keep aluminium markets in surplus and
dampen the price upside, Australia's Northern Territory government was helping
Rio Tinto source cheaper energy in order to keep its Gove alumina
refinery open. 
    Lead closed at $2,405 from $2,414, nickel  at $18,360 from
$18,365 and tin at $24,950 from a last bid of $24,875.
    
 Metal Prices at 1738 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2012   Ytd Pct
                                                              move
  COMEX Cu       374.25       -0.15     -0.04     365.25      2.46
  LME Alum      2141.50       23.50     +1.11    2073.00      3.30
  LME Cu        8237.25        1.25     +0.02    7931.00      3.86
  LME Lead      2413.25       -0.75     -0.03    2330.00      3.57
  LME Nickel   18415.00       50.00     +0.27   17060.00      7.94
  LME Tin      24850.00      -25.00     -0.10   23400.00      6.20
  LME Zinc      2202.50       -7.50     -0.34    2080.00      5.89
  SHFE Alu     15140.00       50.00     +0.33   15435.00     -1.91
  SHFE Cu*     59480.00      120.00     +0.20   57690.00      3.10
  SHFE Zin     15780.00       20.00     +0.13   15625.00      0.99
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07

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