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METALS-London copper rebounds, Shanghai cuts losses after data
April 5, 2012 / 2:01 AM / 6 years ago

METALS-London copper rebounds, Shanghai cuts losses after data

* China services sector expands again in March-HSBC
    * U.S. nonfarm payrolls seen next trigger for rally
    * Coming Up: U.S. jobless claims; 1230 GMT

 (Updates prices)	
    By Manolo Serapio Jr	
    SINGAPORE, April 5 (Reuters) - London copper rose on
Thursday, recovering after its biggest fall in nearly two months
in the prior session, aided by data showing sustained growth in
top consumer China's services sector which also helped Shanghai
prices bounce off session lows.	
    Wednesday's 3-percent slide in London copper provided buying
opportunity for China, where markets reopened after a three-day
holiday. 	
    China's services sector expanded again in March as business
confidence hit an 11-month high, according to a survey of
private firms by HSBC.  	
    The seasonally adjusted HSBC Services Purchasing Managers
Index stood at 53.3 last month, down slightly from February's
53.9, but signalling healthy growth with the new business
sub-index extending an unbroken run of expansion to 40 months.
 	
    Three-month copper on the London Metal Exchange 
gained half a percent to $8,389.25 a tonne by 0717 GMT, after
dropping 3.1 percent on Wednesday - its largest one-day fall
since Feb. 10.	
    For the week so far, LME copper is off 0.8 percent, its
second weekly loss in three. LME is closed on Friday and next
Monday for Easter holidays.    	
    The most-traded July copper contract on the Shanghai Futures
Exchange dropped 0.2 percent to close at 59,970 yuan
($9,500) a tonne, well off the day's low of 59,140 yuan.	
    "I think last night's selloff was at least overdone," said
Judy Zhu, commodity analyst at Standard Chartered Bank in
Shanghai.	
    	
    U.S PAYROLLS EYED	
    At best, Zhu said she expects copper to be stuck in tight
ranges given a modest consumption growth outlook in China, which
uses 40 percent of the world's copper.	
    "I don't see much downside risk for now but I also don't see
much upside risk. The outlook for demand from China is very
moderate because of the slower growth in the economy," she said.	
    Despite a growing services sector, China's manufacturing
activity has remained weak, with output falling for a fifth
straight month in March, according to a separate HSBC survey
released on Sunday. 	
    Fading expectations of more stimulus from the U.S. Federal
Reserve, along with a weak Spanish bond sale which revived
worries about funding difficulties by weaker countries in the
debt-laden euro zone, caused Asian equities to trip further on
Thursday. 	
    Some analysts say concerns about the potential absence of
more Fed-led bond-buying seem misplaced given the brighter
outlook for the U.S. economy which bodes well for demand.	
    Citing still tight global supply conditions for copper,
Credit Suisse said it believes there is "significant
probability" that industrial metals prices will rebound
materially and the next catalyst may be the U.S. nonfarm
payrolls due out on Friday.	
    The U.S. nonfarm payrolls report is expected to show a
fourth month of solid job growth in the United States in March,
according to economists polled by Reuters.	
    On Wednesday, private-sector jobs data, released by payrolls
processor ADP, showed U.S. employers added 209,000 jobs last
month, suggesting the labour market was continuing to
strengthen. 	
    "The next set of data to watch will be those coming out of
China, since the American economy looks pretty stable for now.
Any big news out of the Chinese economy may be a game changer,
although I doubt figures will get any worse than what we have
already seen," CIFCO Futures chief analyst Zhou Jie said.	
       	
  Base metals prices at 0717 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8389.25     39.25     +0.47     10.38
  SHFE CU FUT JUL2    59970      -130     -0.22      8.33
  HG COPPER MAY2     380.80      1.75     +0.46     10.83
  LME Alum          2101.00      8.00     +0.38      4.01
  SHFE AL FUT JUN2    16070       -95     -0.59      1.42
  LME Zinc          1990.00      8.00     +0.40      7.86
  SHFE ZN FUT JUN2    15470       -55     -0.35      4.56
  LME Nickel       17940.00     85.00     +0.48     -4.12
  LME Lead          2014.75      2.25     +0.11     -1.00
  SHFE PB FUT      15530.00    -40.00     -0.26      1.60
  LME Tin          22505.00    -95.00     -0.42     17.21
  LME/Shanghai arb^    2021
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
 ($1 = 6.2980 Chinese yuan)	
	
 (Additional reporting by Carrie Ho in Shanghai; Editing by
Himani Sarkar)

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