December 30, 2014 / 11:50 AM / in 5 years

METALS-Copper edges up after 4-1/2-year low hit on China growth woes

* Dip in dollar seen as temporary but gives copper support

* China growth still a concern; Wednesday’s PMI data awaited (Recasts, updates prices, adds details/quote, changes dateline)

By Maytaal Angel

LONDON, Dec 30 (Reuters) - Copper edged up on Tuesday as investors deemed concerns about slowing growth in China and rising supplies as priced in for now given the metal touched its lowest in 4-1/2 years in the previous session.

A weaker dollar also helped copper recover its poise by making the metal cheaper for non-U.S. investors.

Three-month copper on the London Metal Exchange edged up 0.39 percent to $6,314.75 by 1111 GMT, on course for a fall of around 14 percent this year and within sight of the 4-1/2 year low of $6,230 a tonne hit on Monday.

“The bounce appears to be driven by some short covering ahead of year-end, following the recent declines. Volumes however are especially thin,” said Dee Perera, analyst at Marex Spectron.

Most investors are cautious about copper going into 2015 given supplies are expected to increase just as economic growth in China, which consumes some 45 percent of the world’s copper, looks set to step down a gear.

The next reading on China’s growth is due on Wednesday with the release of the HSBC manufacturing PMI. According to a Reuters poll the data will likely show growth in the sector slowed to an 18-month low in December.

Investors are hoping Chinese authorities will roll out more stimulus measures to support the economy. Still, a top Chinese government think tank said on Monday growth is expected to slow to 7 percent next year from a forecast of 7.3 percent this year.

Also weighing on copper are signs of increased supplies. LME copper stocks are at 172,250 tonnes, having been on a rising trend since August when fell as low as 140,675 tonnes. MCU-STOCKS

Offering the metal some support however, cash copper on the LME has been trading at a premium to the three month price since July CMCU0-3, indicating physical metal is still not easy to come by despite growing supplies.


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

Three month LME tin (Additional reporting by Naveen Thukral; Editing by Michael Urquhart)

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