December 31, 2014 / 3:33 AM / 5 years ago

METALS-Copper holds firm but on course for worst year in three

(Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Dec 31 (Reuters) - Copper ticked up on Wednesday,
the last trading session of the year, and looked set to post its
worst annual decline in three years on concerns over slowing
growth in top consumer China.
    Three-month copper on the London Metal Exchange was
up 0.1 percent at $6,333.75 a tonne by 0717 GMT, after a 0.6
percent gain from the previous session.
    It fell to $6,230 earlier in the week, its lowest since June
    Prices got some support as the dollar eased on profit taking
after recent gains to a near nine-year peak. 
    Copper was headed for a 14 percent drop for the year, its
worst decline since 2011, on concerns about China, which
consumes some 45 percent of the world's copper, and a looming
supply surplus. 
    "Copper demand growth (in China) has cooled after
mid-December. Most construction projects have been stopped in
the northern part of China due to the winter," said analyst Li
Chunlan at CRU in Beijing, adding that weaker oil and commodity
prices were also hurting prices. 
    "We expect prices to touch a bottom in the first quarter and
rebound from the second quarter because seasonal demand will
pick up from April."
    Investors are hoping Chinese authorities will roll out more
stimulus measures to support the economy and boost demand for
the metal. 
    The People's Bank of China will change rules governing how
loan-to-deposit ratios are calculated at banks starting from
next year, according to a copy of a central bank document seen
by Reuters, in a move that will boost liquidity conditions.
    Still, a top Chinese government think tank said on Monday
that growth is expected to slow to 7 percent next year from a
forecast 7.3 percent this year.
    Data on Wednesday showed that activity in China's factory
sector shrank for the first time in seven months in December,
highlighting the urgency behind a series of surprise easing
moves by Beijing in the past two months. 
    The most-traded March copper contract on the Shanghai
Futures Exchange rose about 1 percent to 45,800 yuan a
tonne on Wednesday, on hopes that stimulus measures would boost
demand. They are headed for a 7 percent drop for the year, a
second straight drop in a row.
    Tin was also headed for its second year of declines,
while aluminium and zinc were on track for
    Three month LME copper          
    Most active ShFE copper         
    Three month LME aluminium       
    Most active ShFE aluminium      
    Three month LME zinc            
    Most active ShFE zinc           
    Three month LME lead            
    Most active ShFE lead           
    Three month LME nickel          
    Three month LME tin             

 (Reporting by A. Ananthalakshmi; Editing by Ryan Woo, Kim
Coghill and Subhranshu Sahu)
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