January 17, 2012 / 11:08 AM / 8 years ago

METALS-Copper up after better-than-expected China GDP data

* Aluminium stocks hit record high, rise above 5 million
tonnes
    * Copper inventories drop to 13-month low
    * Aluminium cuts not enough to offset oversupply, stocks

    By Silvia Antonioli and Maytaal Angel	
    LONDON, Jan 17 (Reuters) - Copper rose more than 2
percent to hit its highest in almost three months on Tuesday as
Chinese growth data fuelled hopes of steady metals demand going
forward, though fears over Europe's debt kept gains in check.	
    Benchmark copper on the London Metal Exchange ended at
$8,200 a tonne at, up more than 1 percent from a close of $8,089
on Monday. Earlier it hit a session high of $8,262 a tonne, its
highest since the end of October.	
    The Chinese economy grew by a better-than-forecast 8.9
percent in the fourth quarter of 2011, although growth was at
the slowest pace in 2-1/2 years, prompting speculation
authorities will try boost growth by tweaking monetary policy.
 	
    China accounts for about 40 percent of global copper
consumption.	
    "The consensus is we'll probably see a soft landing in China
(but) you've got to remain cautious because of what's happening
in Europe... Greece is bankrupt (but) the market is brushing off
bearish news," said Jaspar Crawley, metals broker at Triland. 	
    Some market participants believe China will implement some
monetary easing measures in the near future taking into account
the fact that China's inflation rate eased to a 15-month low in
December. 	
    "Our economists expect the reserve requirement ratio already
to be cut in the near future," said Commerzbank in a research
note. "This is giving considerable buoyancy to metal prices this
morning."	
    A weaker dollar against the euro also supported industrial
metals, making them cheaper for European investors.  The euro
rose for the first time in three trading sessions as
better-than-expected Chinese and German data gave risk sentiment
a shot in the arm.       	
    German investor sentiment posted its biggest ever monthly
improvement in January, helped by recent upbeat data and hopes
for the European Central Bank's efforts to ease the region's
debt problems.  	
    But behind the brighter economic sentiment, worries remain
about the prospects of a Greek debt default, which some fear
could happen as soon as March when 14.5 billion euros of bond
redemptions fall due.  	
     A growing number of experts, including some from ratings
agencies, have warned a default was on the cards after Greece's
talks with creditors broke down on Friday.  	
   	
    RECORD ALUMINIUM STOCKS	
    For now, however, investors are looking at the bright side,
with falling inventories of copper in LME-monitored warehouses,
which point to improving demand, also in focus.	
    Copper stocks fell 1,150 tonnes to 353,425
tonnes, their lowest in more than 13 months.	
    Stockpiles of aluminium held in LME warehouses,
on the other hand, hit a record above 5 million tonnes.
 	
    The build-up was due to large shipments into the Dutch port
of Vlissingen and also into Detroit and came as the LME's
January contract rolled over. The LME allows physical settlement
of contracts. 
    In November, traders said large inflows were expected over
the end of 2011 as a souring economic outlook curbed demand and
a European dollar crunch intensified the need for cash.
 Metal is sometimes delivered into LME warehouses
because the cheaper finance can be secured against it.	
    Aluminium ended at $2,227 a tonne from $2,161,
having earlier hit a two-and-a-half-month high at $2,228 a
tonne.	
    Last week aluminium prices were boosted by production cuts
announced by U.S. aluminium producer Alcoa and Norwegian
producer Norsk Hydro.
   	
    Some analysts say the price increase was a bit overdone as
the announced production curtailment is not high enough to
offset heavy oversupply, high stocks and the new capacity
planned.	
    "These cuts are a drop in the ocean compared with the new
capacity that producers are bringing on stream," said Citigroup
analyst David Wilson.	
    Tin ended up more than 4 percent at $21,725 from
$20,850, having hit a two-month high earlier of $21,740; while
zinc, used to galvanize steel, ended up more than 2
percent at $2,001 from $1,961 at Monday's close, having earlier
hit a more than one-month high at $2,015.50.	
    Battery material lead <CMPB3 closed up nearly 4 percent at
$2,108 a tonne from $2,030, having earlier hit a more than 1
month high of $2,110, and nickel ended up nearly 1
percent at $19,525 from $19,425.	
    	
 Metal Prices at 1719 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2010   Ytd Pct
                                                              move
  COMEX Cu       373.20        9.80     +2.70     444.70    -16.08
  LME Alum      2227.00       66.00     +3.05    2470.00     -9.84
  LME Cu        8193.50      104.50     +1.29    9600.00    -14.65
  LME Lead      2102.00       72.00     +3.55    2550.00    -17.57
  LME Nickel   19551.00      126.00     +0.65   24750.00    -21.01
  LME Tin      21701.00      851.00     +4.08   26900.00    -19.33
  LME Zinc      2003.25       42.25     +2.15    2454.00    -18.37
  SHFE Alu     16370.00      155.00     +0.96   16840.00     -2.79
  SHFE Cu*     59930.00     1600.00     +2.74   71850.00    -16.59
  SHFE Zin     15525.00      215.00     +1.40   19475.00    -20.28
 ** 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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