April 5, 2016 / 2:23 AM / 4 years ago

METALS-Copper firms after 7-day drop, China's growth woes cap gains

* China growth concerns, oversupply keep market near 1-mth low

* Shanghai copper hits lowest since early March (Updates prices)

By Naveen Thukral

SINGAPORE, April 5 (Reuters) - London copper edged higher on Tuesday as the market took a breather after sliding for the last seven sessions, but slowing growth in top consumer China and global oversupply kept a lid on prices.

Three-month copper on the London Metal Exchange had risen 0.4 percent to $4,780.50 a tonne by 0719 GMT. It fell 1.5 percent on Monday, hitting its lowest in one-month at $4,757.50.

The most-traded copper contract on the Shanghai Futures Exchange dropped as much as 1.4 percent to a one-month low of 36,500 yuan a tonne. It closed the day down 0.7 percent at 36,730 yuan.

“Over the past week, copper prices have converged with our view that the recent rally was unsustainable, as it was built on transient technical factors and poor fundamentals,” Barclays said in a research note.

Asian shares and other riskier assets skidded on Tuesday, pressured by slumping crude oil prices and mixed messages from Federal Reserve policymakers on the outlook for U.S. interest rate rises.

Copper had gained nearly a fifth between mid-January and mid-March, but analysts say the rise was not fully supported by improvements in economic conditions or supply and demand fundamentals.

It has slid about 7 percent since hitting a four-month peak of $5,131 in mid-March.

Further losses in copper are likely as financial investors get to grips with what the physical market already knows - that Chinese demand is subdued and expected to remain so, industry participants said.

Recent upbeat Chinese data has failed to lift copper prices, which some analysts say is an indication the metal’s rally in the beginning of the year was overdone.

While China’s manufacturing activity unexpectedly expanded for the first time in nine months in March, factories still shed jobs at a significant rate.

Global market spillovers from China’s economic shocks will only increase in coming years as the country’s financial influence grows and the yuan’s use as a funding currency broadens, the International Monetary Fund said on Monday.

Among other metals, zinc fell 1.2 percent to $1,831 a tonne and nickel eased 0.3 percent, after a slide in the previous session sent it to a near seven-week low of $8,245 a tonne.


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 (Reporting by Naveen Thukral and A. Ananthalakshmi; Editing by Joseph Radford and Savio D’Souza)

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