February 18, 2016 / 2:56 AM / in 4 years

METALS-London copper slips as China growth fears offset oil bounce

* Copper fundamentals improve as seasonal demand picks up -broker

* Coming up: U.S. Philly Fed business index at 1330 GMT (Adds comment, detail; updates prices)

By Melanie Burton

MELBOURNE, Feb 18 (Reuters) - London copper edged lower on Thursday, as persistent jitters over China’s growth tempered support from soaring oil and a successful short-term debt refinancing by commodities giant Glencore.

Prices have been hit by slow demand over the Lunar New Year, and global growth concerns that have flattened trade. But with factories ramping up ahead of China’s seasonal demand peak in the second quarter, analysts say prices should begin to find support.

“We expect copper’s supply and demand fundamentals, especially in Q1, to improve on the back of seasonal demand recovery from power grids and home appliance sectors, as well as resilient growth in the auto sector,” Argonaut Securities said in a note.

Miners have also cut production and China’s smelters have pledged to curb output in the first quarter, adding to price support, it said.

London Metal Exchange copper was trading at $4,579.50 a tonne by 0231 GMT, down 0.2 percent and paring 0.7-percent gains from the previous session. Copper was not far from its highest in more than a week, with any break above resistance at $4,615 likely to spark technical buying.

Shanghai Futures Exchange copper pared early gains to close up 0.1 percent at 35,700 yuan ($5,478) a tonne.

A copper concentrates trader said there was good demand for shipments from late April to early May - traditionally the strongest season for copper demand in China.

“It’s not a problem to place shipments further out, but if you were trying to place anything for the next month, you might struggle,” the trader said.

Zinc rebounded more than 1 percent after a large stock build this week weighed on prices, but the move was made on low volumes, while lead recovered some of Wednesday’s 3-percent loss that also came after a jump in LME stocks.

Crude oil futures rose in Asian trade on Thursday after Iran welcomed plans by Russia and Saudi Arabia to cap production, although analysts said the move would not lead to any output cuts and Tehran offered no action of its own.

China’s consumer inflation quickened to a five-month high in January due to rising food prices but producer prices shrank for a 47th straight month as falling commodity markets and weak demand add to deflationary pressure in the world’s second-largest economy.

Meanwhile, U.S. industrial production in January rose by the most in 14 months as manufacturing and utilities output increased, the latest sign the economy regained some ground early in the year.

Elsewhere, mining and trade house Glencore Plc has raised $8.4 billion in commitments as part of an early refinancing of its short-term debt, sending its shares up as much as 12 percent on Wednesday.


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 = 6.5171 Chinese yuan renminbi $1 = 6.5166 Chinese yuan renminbi Reporting by Melanie Burton; Editing by Joseph Radford

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