NEW YORK/LONDON (Reuters) - Copper steadied on Thursday following a 3 percent plunge the day before, helped by consumer buying and upbeat jobs data in the United States, but a long Easter weekend in the U.S. and European markets limited gains.
Investors sided with caution on Thursday, failing to take on any big bets in front of a key U.S. non-farm payrolls report on Friday and trade data from top copper consumer China, which will shed light on consumption in a country that accounts for 40 percent of world copper demand.
Both figures are due before London reopens on Tuesday after the 4-day Easter holiday weekend. The New York copper market will be closed on Friday, reopening on Monday.
“Markets are pausing to digest this week’s sell-off,” said Adam Sarhan, chief executive of Sarhan Capital.
“We’re data-dependent. Tomorrow’s jobs report and China’s trade figures next week are either going to define growth or lay a more cautious element to the global recovery.”
Economists polled by Reuters expect the nonfarm payrolls report will show the U.S. economy added 203,000 jobs last month. That would represent a fourth straight month of solid job creation, marking the longest stretch of monthly employment gains topping 200,000 since 1999.
London Metal Exchange (LME) three-month copper closed up $11 at $8,361 a tonne.
In New York, the COMEX May contract firmed 0.50 cent to settle at $3.7955 per lb, after dealing between $3.7745 and $3.8270.
Copper rallied this week to within 1 percent of its 2012 peaks above $8,700 a tonne and near $4 per lb on anticipation of more monetary easing in the United States. But minutes from a U.S. monetary policy meeting on Tuesday quashed those expectations and led to a divestment of risk across markets.
Now prices are trading back within the middle of a range held since late January, bid higher when they reach the bottom of the range near $8,200 a tonne ($3.71 per lb) and capped by producer selling at around $8,600 ($3.90/lb), Citi analyst David Wilson said.
“Each time copper dips we see consumer hedging and some buying from investors. But as prices get to about $8,600, you’re getting some of the small producers selling. Funds have no conviction either way, so it seems to be stuck in this range for now,” he said.
(Graphic: link.reuters.com/puc57s )
Copper was capped by a stronger dollar versus the euro after data showed the number of Americans lining up for new jobless benefits fell to the lowest in nearly four years last week, while a disappointing Spanish debt auction on Wednesday fueled worries about further problems for euro zone economies.
A stronger dollar makes U.S. priced commodities like copper and aluminum more expensive for holders of other currencies.
Chinese trade data early on Tuesday is expected to show consistently high copper imports as metal is used as collateral to secure cheaper financing in the credit-strapped country. ECONCN
China’s arrivals of refined copper are expected to have risen in March after February’s higher-than-expected figure as importers scheduled more term shipments under 2012 contracts on expectations of peak domestic demand, traders said last month.
“You’re probably going to find the import number is reasonable, given the Chinese are buying for financing reasons. It’s just got nothing to do with consumption,” Citi’s Wilson added.
Import figures, which used to be seen as a barometer for demand, have become muddied over the past year because up to 80 percent of imports are used for financing deals.
Given still paltry domestic demand, traders are also interested in the volume of exports, which may have jumped in March as local smelters and traders took advantage of higher international prices to sell their plentiful stocks abroad.
Consistent with the re-export of metal from China, copper stocks in warehouses monitored by the LME rose by more than 5,000 tonnes, data showed on Thursday, with shipments registered in Singapore and Busan.
Metal Prices at 2.54 p.m. EDT
Metal Last Change Pct Move End 2011 Ytd Pct
COMEX Cu 379.75 0.70 +0.18 343.60 10.52
LME Alum 2109.00 16.00 +0.76 2020.00 4.41
LME Cu 8361.00 11.00 +0.13 7600.00 10.01
LME Lead 2059.00 46.50 +2.31 2035.00 1.18
LME Nickel 18405.00 550.00 +3.08 18710.00 -1.63
LME Tin 23170.00 570.00 +2.52 19200.00 20.68
LME Zinc 2003.00 21.00 +1.06 1845.00 8.56
SHFE Alu 16070.00 -95.00 -0.59 15845.00 1.42
SHFE Cu* 59910.00 -100.00 -0.17 55360.00 8.22
SHFE Zin 15395.00 -50.00 -0.32 14795.00 4.06 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
Additional reporting by Susan Thomas; Editing by Anthony Barker and Bob Burgdorfer