December 8, 2017 / 11:50 AM / 2 years ago

METALS-Stronger China demand prospects fuel copper's rise

* LME/ShFE arb:

* China’s copper concentrate imports at record high

* China’s rising aluminium exports cause concern (Adds closing prices)

By Pratima Desai

LONDON, Dec 8 (Reuters) - Copper prices rose on Friday after data showing a jump in Chinese imports of the metal fuelled expectations of stronger demand from the top consumer, but gains were capped by a rising dollar.

Benchmark copper on the London Metal Exchange ended up 0.1 percent at $6,571 a tonne from an earlier session high at $6,674.50.

China’s unwrought copper imports in November, at 470,000 tonnes, were up more than 40 percent from the previous month, a sign that winter production restrictions are driving up shipments.

“The November data isn’t surprising given Golden Week holidays in China in October. But it has alleviated demand concerns,” said Julius Baer analyst Carsten Menke.

“China demand will remain the focus for the copper market ... We think there will be some headwinds from the property market where indicators also show a softening.”

PROPERTY: Property sales by floor area in China fell 6.0 percent in October from a year earlier, compared with a 1.5 percent decline in September. The decline was the biggest since the first two months of 2015.

COPPER: Unwrought copper imports for the first 11 months of 2017, at 4.24 million tonnes, are down 5 percent from the same period last year. Copper concentrate imports rose 0.1 percent year-on-year to a new record high of 1.78 million tonnes in November.

DEMAND: China accounts for nearly half of global copper demand. Global copper demand is estimated at around 23 million tonnes this year.

CONCENTRATE: “Chinese traders appear to have bought more copper abroad because some copper smelters in the country have reduced their production for environmental reasons or because the traders expect production to be cut,” Commerzbank analysts said in a note.

“The fact that copper concentrate imports climbed to a record high in November does not tally with this argument, however. It points rather to an ongoing high level of refined copper production in China.”

DOLLAR: A higher U.S. currency makes dollar-denominated metals more expensive for non-U.S. firms. The dollar rose against a trade-weighted basket of its rivals, on track for its biggest weekly rise in nearly six weeks.

TECHNICALS: Support for copper kicks in at $6,500, near Tuesday’s low and resistance is at $6,670, the 100-day moving average.

ALUMINIUM: Aluminium traded up 0.1 percent at $2,011 a tonne, but prices are down nearly 10 percent since early November on concern about rising exports from top producer China.

EXPORTS: “It was surprising to see exports pick up again, it does cast doubt on the idea of China capacity cuts tightening the market,” Menke said.

OTHER METALS: Zinc ended down 0.2 percent at $3,083, lead rose 0.6 percent to $2,448, tin added 0.1 percent to $19,450 and nickel lost 0.9 percent to $10,950 a tonne.

Editing by Gareth Jones and David Evans

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