May 11, 2012 / 9:29 AM / 8 years ago

METALS-Copper posts 2nd weekly loss on China slowdown fears

* China industrial output, retail and investment data disappoint
    * JP Morgan trading loss weighs on European shares
    * Risk assets fail to gain traction from Greek coalition hopes

    By Chris Kelly and Maytaal Angel	
    NEW YORK/LONDON, (Reuters) - Copper fell for a second-straight week on
Friday, trading lower in reaction to Europe's escalating debt crisis and another
round of data confirming a slowdown in top metals consumer China.	
    Copper bulls were dealt a serious blow on Friday after a string of data from
China, including below-forecast industrial output, retail sales, fixed asset
investment and copper production, suggested a further deceleration in growth
from a region of the world that accounts for nearly 40 percent of the world's
copper demand. 	
    "This is certainly not helping the bull case," said Michael Gross, futures
analyst with in Tampa, Florida.	
    "There's been this theme over the last few months of growth slowing in
China, and it's now confirmed in the numbers."	
    London Metal Exchange (LME) three-month copper shed $92 or nearly 1
percent to close at $8,013 a tonne.	
    In New York, the July COMEX contract ended down 4.25 cents at $3.6480
per lb, after dealing between $3.6165 and $3.6835.	
    For the month, copper prices in both London and New York have lost nearly
five percent, slicing the year's gains in half.	
    COMEX copper volumes, at around 59,100 lots in late New York trade, slowed
to almost a quarter below their 30-day average,  according to preliminary
Thomson Reuters data.	
    On top of the softer Chinese data, copper investors also had to contend with
inconclusive election results in Greece this week that threw the country into
political disarray, as well as a huge trading loss from JPMorgan, whose failed
hedging strategy rattled most risk asset markets on Friday. 	
    But providing some salve was U.S. consumer sentiment that rose to its
highest level in more than four years in early May. 	
    "When you see the Chinese data out today and the trade data yesterday,
copper should be going lower," said analyst David Wilson of Citi.	
    "But the tightness on the LME is probably supportive and  every time it does
get to the $8,000 a tonne level, consumers do appear to buy buying into that,"
he added.	
    Latest data showed LME copper stocks climb 1,425 tonnes at 221,275 tonnes,
near their lowest levels in 3-1/2 years. Shanghai's copper stockpiles fell 13
percent last week, though they remain elevated near a 10-year high of 227,276
tonnes hit in March.  
   Reflecting tight supply outside China, the cost to rolling short positions
for nearby copper on a tomorrow/next day basis, for delivery next week, remains
expensive at $3.77 on Friday, although down from a high of $13.00 earlier in the
    With the prime prompt date for May next week Wednesday, costs to roll short
positions could climb further, traders said, if metal for delivery can't be
    In news, Poland's copper miner KGHM does not expect the average
annual price of copper to drop below $8,000 per tonne, the group's Chief
Executive Officer Herbert Wirth told Reuters on Friday. 
    Across other metals, Indonesia plans to introduce new quotas to limit
mineral exports, as well as a 20 percent duty on mineral exports by certain
companies, Indonesian government officials said on Friday.  	
   "(An) export tax will put a solid floor under LME nickel prices, but we
don't see a supply shortage any time soon," ANZ said in a research note.	
   Support also came as Vale, the world's second-biggest nickel
producer, said on Thursday it would suspend sales and purchase agreements at its
Goro project on the French Pacific island of New Caledonia after an accident at
the mine's sulfuric acid plant. 	
   Nickel closed up $30 at $17,195 a tonne.	
    In other metals, lead ended off $18 at $2,072 a tonne.	
    Doe Run Co restored its primary lead smelter in Herculaneum, Missouri, this
week to its full production capacity of 130,000 short tons a year and is on
track to meet its production target for May, a company executive said on
 Metal Prices at 1801 GMT
  Metal            Last      Change  Pct Move   End 2011   Ytd Pct
  COMEX Cu       363.45       -5.60     -1.52     343.60      5.78
  LME Alum      2044.50       -1.00     -0.05    2020.00      1.21
  LME Cu        8013.00      -92.00     -1.14    7600.00      5.43
  LME Lead      2072.00      -28.00     -1.33    2035.00      1.82
  LME Nickel   17190.00       25.00     +0.15   18710.00     -8.12
  LME Tin      20500.00       75.00     +0.37   19200.00      6.77
  LME Zinc      1948.00      -21.00     -1.07    1845.00      5.58
  SHFE Alu     16060.00      -60.00     -0.37   15845.00      1.36
  SHFE Cu*     57500.00     -400.00     -0.69   55360.00      3.87
  SHFE Zin     15030.00     -250.00     -1.64   14795.00      1.59
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07
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