June 9, 2015 / 9:50 AM / 5 years ago

METALS-Higher commodities provide tailwind for copper's rise

* China investment, industrial production data due this week

* Market expects further China stimulus measures (Adds closing prices)

By Pratima Desai

LONDON, June 9 (Reuters) - Copper prices rose on Tuesday due to a flurry of buying triggered by a weak dollar early in the day and a rally in commodities across the board.

However, gains in the metal used in power and construction were limited by expectations of weak economic data from top consumer China this week.

Benchmark copper ended at $5,970 a tonne, up from $5,948 at Monday’s close.

Clues on prospects for industrial metals demand will come from Chinese data on loans, investment and industrial production due in the next few days.

“The Chinese data over the next two days is likely to be relatively soft; there won’t be any massive surprises. Near-term trends will also depend on the dollar’s dynamics,” said Xiao Fu, head of commodity markets strategy at Bank of China International.

“Over the medium term we are cautious about prospects for the base metal complex. We’re not expecting prices to fall significantly, but there is some downside risk from current levels.”

A lower U.S. currency makes dollar-denominated commodities cheaper for non-U.S. firms and vice versa, a relationship reinforced by funds that use computer models to make trading decisions.

Also helping to support copper is the idea that China will provide further stimulus measures to boost growth and demand if data continues to show its economy is slowing.

“Additional measures are likely to be necessary because the sharp decline in producer prices in May points to weak domestic demand,” Commerzbank said in a note.

Signs of weak copper demand were reflected in the discount of around $50 a tonne for cash metal over the three-month future.

Aluminium closed unchanged from Monday’s last bid at $1,750. Lead gained about one percent to $1,930 from Monday’s close at $1,910, and tin slipped to $15,250 from $15,440.

Zinc rose one percent to $2,160 from $2,139 on Monday. It earlier touched a one-week peak of $2,182.

Nickel was up at $13,495, from $13,420 on Monday. It earlier hit a three-week high of $13,620.

The nickel market is waiting to see if workers at Sherritt International Corp’s Ambatovy project decide to go on strike, which could widen an expected deficit of nickel for this year.

PRICES

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

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

$1 = 6.2048 Chinese yuan renminbi Editing by David Goodman and Susan Fenton

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