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METALS-Copper slips on low China demand; patchy Asia earnings
March 20, 2012 / 9:03 AM / 6 years ago

METALS-Copper slips on low China demand; patchy Asia earnings

* ShFE-LME three-month copper price differential weakest
since Jan 2011
    * Lacklustre Chinese demand seen capping copper gains
    * Coming up: Feb U.S. housing starts/building permits; 1230
GMT

 (Updates prices, adds detail)	
    By Melanie Burton	
    SINGAPORE, March 20 (Reuters) - London copper slipped on
Tuesday, tracking losses in Asian equities after a string of
Chinese companies missed their earnings targets, while bleak
demand expectations from Chinese copper consumers also
discouraged buying.	
    Three-month copper on the London Metal Exchange fell
0.62 percent to $8,516.75 per tonne by 0849 GMT, having risen to
almost $8,600 earlier in the session.     	
    Copper hit its highest in two weeks at $8,690 on Friday and
is up more than 12 percent this year, but prices have struggled
to gain traction above this level.	
    The most-traded June copper contract on the Shanghai Futures
Exchange eased 0.08 percent to 60,350 yuan ($9,500) per
tonne.	
    Demand from top copper user China remained slack, and hopes
for an increase in purchases were slim, given easing demand for
exports of copper products, due to the economic slowdown in
Europe, as well as weakness in domestic consumption, Standard
Chartered metals analyst Judy Zhu said.	
    Official Chinese data showed home prices fell in February
from January for a fifth consecutive month, and the government
reiterated its commitment to measures to control the property
market to cool speculation. 	
    "In the last week copper prices have stabilized around
$8,500 a tonne, but it's really moving nowhere and facing strong
overhead resistance," Zhu said.	
    "Demand is starting to recover from last month's previously
low levels but consumers don't expect any strong recovery this
year - that's the problem."  	
    China accounts for 40 percent of global refined copper
demand. 	
    Consumers are keeping low inventories and are reluctant to
purchase any more material than they need immediately because of
expectations prices will not rise much higher.	
    Reflecting an absence of near-term purchases, the negative
price differential between London and Shanghai copper hit a
14-month low near $450 on Tuesday. Front-month Shanghai copper
remains at a 400-yuan discount to third-month prices, having
been at a premium late last year.	
    China's arrivals of refined copper may rise this month,
however, as importers scheduled more term shipments under 2012
contracts, traders said, and as the metal is used for financing
purposes. 	
    Investors are closely watching U.S. housing figures which
will be released later on Tuesday for an indication about metal
demand, Credit Suisse Private Banking said in a note.	
    "Market participants expect a moderate pick-up of activity
from very low levels. This would be positive news for metals, as
housing accounts for a sizeable share of metals demand," it
said.	
    Shares slipped on Tuesday, led by losses in Hong Kong and
Shanghai on underwhelming corporate earnings, while the euro
held near its highest level in a week on easing fears about
wider damage to the financial system from Greece's debt crisis.
 	
 	
                                                               
  Base metals prices at 0849 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8516.75    -53.25     -0.62     12.06
  SHFE CU FUT JUN2    60350        50     +0.08      9.01
  HG COPPER MAY2     387.55     -3.35     -0.86     12.79
  LME Alum          2257.00    -18.00     -0.79     11.73
  SHFE AL FUT JUN2    16265       -10     -0.06      2.65
  LME Zinc          2065.75    -13.25     -0.64     11.96
  SHFE ZN FUT JUN2    15885        10     +0.06      7.37
  LME Nickel       18950.00   -100.00     -0.52      1.28
  LME Lead          2084.00    -24.00     -1.14      2.41
  SHFE PB FUT      15860.00     -5.00     -0.03      3.76
  LME Tin          23425.00   -170.00     -0.72     22.01
  LME/Shanghai arb^    2665
 
   Shanghai and COMEX contracts show most active months
 ($1=6.3233 Chinese yuan)	
	
 (Reporting by Melanie Burton; Editing by Miral Fahmy)

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