March 20, 2012 / 8:38 AM / 6 years ago

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

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

 (Updates prices)	
    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
0.44 percent to $8,532 per tonne by 0750 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
    Demand from top copper user China remained slack, and hopes
for an increase in purchases were slim, given weak demand for
copper exports due to the economic slowdown in Europe and also a
decline 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," she said.	
    "Demand is starting to recover from last months' previously
low levels but consumers don't expect any strong recovery this
year - that's the problem," she said.  	
    China accounts for 40 percent of global refined copper
    Consumers are keeping low inventories and are reluctant to
purchase any more material than they need immediately because of
expectations prices won't 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
    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
    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 0750 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8532.00    -38.00     -0.44     12.26
  SHFE CU FUT JUN2    60350        50     +0.08      9.01
  HG COPPER MAY2     388.25     -2.65     -0.68     12.99
  LME Alum          2267.75     -7.25     -0.32     12.26
  SHFE AL FUT JUN2    16265       -10     -0.06      2.65
  LME Zinc          2073.00     -6.00     -0.29     12.36
  SHFE ZN FUT JUN2    15885        10     +0.06      7.37
  LME Nickel       18988.00    -62.00     -0.33      1.49
  LME Lead          2095.00    -13.00     -0.62      2.95
  SHFE PB FUT      15860.00     -5.00     -0.03      3.76
  LME Tin          23570.00    -25.00     -0.11     22.76
  LME/Shanghai arb^    2773
   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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