January 24, 2011 / 10:48 AM / 9 years ago

METALS-Copper ends up, tin hits record on supply concerns

 * Tin strikes record at $28,190 a tonne
 * Copper to average $9,663/T this year - Reuters poll
 * Investors keep eye on lead dominant position
 * Coming up: U.S. consumer confidence data on Tuesday
 (Updates with New York closing copper price, adds New York
dateline and analyst comments)
 By Chris Kelly and Rebekah Curtis
 NEW YORK/LONDON, Jan 24 (Reuters) - Copper ended up for a second
consecutive day on Monday, and tin prices notched a new record high
as supply-side constraints reinforced a bullish outlook for both
metals.
 Down about 5 percent from all-time records this year at $9,781
per tonne in London and $4.4980 per lb in New York, copper prices
regained their composure late last week in anticipation of robust
Chinese demand prospects, even as fears of tighter monetary policies
there remained. [ID:nTOE70J02S]
 London Metal Exchange (LME) copper for three-month delivery
CMCU3 closed up $88 at $9,529 a tonne.
 COMEX March copper HGH1 added 3.95 cents to settle at $4.3485
per lb, after dealing between $4.3090 and $4.3725.
 LME tin CMSN3 hit a record high of $28,190 a tonne, before
ending the day at $28,095, up $350 from Friday's close.
 "Tin and copper are very supply constrained metals, that's not
going to be resolved for many months, if not years," Robin Bhar, an
analyst at Credit Agricole, said.
 Indeed, a widening market deficit could propel copper to new
record highs this year, as exchange-traded products and a narrowing
supply surplus buoy prices, according to a Reuters poll.
[ID:nLAE002208]
 The consensus of 50 forecasts showed the cash copper price
CMCU0 would average $9,663 a tonne this year.
 Tin is forecast to rise almost 38 percent this year, according to
the average of 24 forecasts, the Reuters poll showed, driven by
dwindling reserves, rising demand, and unusually wet weather in big
producer Indonesia. [ID:nLDE70N1E2]
  <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
  For other stories from the survey: [MET/POLL]
  For full results of the survey: COMMODITYPOLL01
  For a column on the poll results click [AHOME/]
  Graphic on prices: r.reuters.com/mut57r
  Graphic on prices versus 2010 average prices:
  r.reuters.com/nut57r
  Graphic on market balances: r.reuters.com/put57r
  ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 Analysts expect to see further price volatility in the days ahead
as markets adjust for the week-long Chinese Lunar New Year, set to
begin on Feb. 3.
 "While we are not expecting any extended sell-off's, temporary
dips lower are likely," said Catherine Virga, senior base metals
analyst with CPM Group.
 "Chinese consumers have remained wary about restocking copper
after running down their inventories during the last nine months of
2010 ... Chinese demand for overseas metals in expected to pick up
during March, with seasonal pressures," she said.
 Investors also focused on French President Nicolas Sarkozy's
comments, as he laid out his G20 agenda on Monday, that he wanted
regulation of commodity markets. [ID:nLDE70N0Y4]
 While his comments appeared mostly targeted at agricultural
commodities, some analysts believe it could affect sentiment through
the rest of the commodities complex.
 "I would expect more politicians to come out and make comments on
this," said Alex Heath of RBC Capital Markets. "It's going to hit
back on base metals."
 STOCKS RISE
 Stocks of copper at LME warehouses resumed a recent rise, which
has caused some caution among investors. Stocks last rose 200 tonnes
to 381,500 tonnes.
 Lead stocks rose 2,600 tonnes to 266,775 tonnes, lingering around
the highest levels since May 1995.
 Investors kept an eye on a dominant position controlling 80-90
percent of LME lead stock warrants and cash contracts <LME/WC>.
 Barclays Capital declined to comment on Friday on market talk it
was the holder of the position. [ID:nLDE70K1D7]
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
  Graphic on dominant positions in lead stock warrants and cash
  contracts <LME/WC> on the LME this year:
  here
  ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 LME lead CMPB3 ended down $20 at $2,405 a tonne.
 Investors also focused on the backwardation on lead -- a premium
for cash material over the three-month contract MPB0-3 -- which was
at $60 a tonne.
 The premium shot up to $85 a tonne on Friday, its highest since
October 2007.
 Metal Prices at 1728 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       435.20        4.30     +1.00     444.70     -2.14
 LME Alum      2413.00       -7.00     -0.29    2470.00     -2.31
 LME Cu        9529.00       88.00     +0.93    9600.00     -0.74
 LME Lead      2405.00      -20.00     -0.82    2550.00     -5.69
 LME Nickel   26150.00      -25.00     -0.10   24750.00      5.66
 LME Tin      28090.00      345.00     +1.24   26900.00      4.42
 LME Zinc      2302.00      -16.00     -0.69    2454.00     -6.19
 SHFE Alu     16850.00        5.00     +0.03   16840.00      0.06
 SHFE Cu*     71780.00      810.00     +1.14   71850.00     -0.10
 SHFE Zin     18835.00       25.00     +0.13   19475.00     -3.29
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
 (Additional reporting by Sue Thomas; Editing by Alison Birrane and
Marguerita Choy)


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