METALS-Copper underpinned on China shortfall; traders eye holidays

Tue Apr 29, 2014 8:45am GMT
 

* ShFe copper curve hits widest backwardation in five years

* China domestic copper premiums surge to five year peak

* Coming Up; Germany GfK consumer sentiment May at 0600 GMT (Updates prices)

By Melanie Burton

SYDNEY, April 29 (Reuters) - London copper steadied on Tuesday but was below a near two-month high, underpinned by tight supply in China, while top performer nickel was held below near 15-month highs on fading momentum ahead of a slew of holidays in Asia this week.

Copper prices have clawed back nearly 2 percent in April, given tight credit conditions in China that have restricted some copper consumers from imports in what is the peak season for demand.

"The risks are laid to the upside for the copper price because of what the local premium is reflecting, which is likely a tightness in supply at a time when demand is quite strong," said Morgan Stanley analyst Joel Crane in Melbourne.

Three-month copper on the London Metal Exchange edged up 0.1 percent to $6,753.75 a tonne by 0805 GMT. The contract hit its highest level since March 7 in the previous session at $6,798 a tonne, before closing with a small loss. Prices remain down more than 8 percent this year.

The most-traded July copper contract on the Shanghai Futures Exchange slipped by 0.6 percent to 47,640 yuan ($7,600)a tonne.   Continued...

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