By Melanie Burton
SINGAPORE, April 10 (Reuters) - London copper drifted lower
on Wednesday from near two-week highs hit in the previous
session, as traders took profits on short-covering gains, while
improving trade data from top consumer China underpinned
expectations of metals demand.
China's total exports were in line with forecasts in March,
though imports posted a surprise jump and the country recorded a
trade deficit. That was taken as a sign that domestic demand may
be picking up and reinforced views of a gradual recovery
underway in the world's second-largest economy.
'We've probably seen the lows in many of the base metals for
now,' said economist Alexandra Knight of National Australia Bank
'We're still seeing a modest recovery in the U.S. and we
expect economic growth in China to extend over the first half,
so there's plenty of support for demand,' she added.
Three-month copper on the London Metal Exchange
slipped 0.52 percent to $7,585 a tonne by 0705 GMT, after rising
2.4 percent in the previous session on short-covering, traders
Cooling China inflation on Tuesday reinforced hopes for an
extended easy monetary policy, while improving U.S. earnings
reports fuelled confidence in a global economic recovery,
shoring up expectations for metals demand.
Copper hit its highest in almost two weeks on Tuesday at
$7,645.25 a tonne, extending a rebound from an 8-month low near
$7,330 last week. Prices are still down more than 4 percent on
The most-traded August copper contract on the Shanghai
Futures Exchange hit a nearly two week peak, before
trimming gains to close at 55,140 yuan ($8,900) a tonne, still
up 0.40 percent.
China's annual consumer inflation cooled in March as food
prices eased from nine-month highs and producer price deflation
deepened, data showed on Tuesday, leaving policymakers room to
keep monetary conditions easy and nurture a nascent recovery.
Still, a subdued mood pervaded a gathering of the world's
top copper miners at a conference in Chile, with rising costs,
falling demand and the dearth of quality new projects dominating
talk for the second year in a row.
Production from world No. 1 copper producer Codelco ground
to a halt on Tuesday as workers staged a 24-hour strike
throughout Chile to demand better job security and safety
standards, but private mines in the country were barely
COPPER IMPORTS UP IN MARCH
China's March copper arrivals rose 7.2 percent from a month
ago on hopes factories will resume output after the Lunar New
Year break, but fell by a sharp 30 percent from a year ago,
indicating the pickup in demand was not as strong as
'Entering March, traders were more active in the market,
helped by a more attractive price differential between London
and Shanghai,' said Wan Ling, a metals analyst at CRU in
Wan noted that the pace of improvements in imports was
relatively soft, given that the differential between LME and
ShFE prices was the most favourable for imports since at least
CRU expects financing demand to extend a recovery into
April, due to the improved arbitrage. But traders warned that
imports may be hurt by port and mine strikes in Chile and a
shutdown of India's top copper smelter.
Base metals prices at 0705 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7585.00 -40.00 -0.52 -4.34
SHFE CU FUT AUG3 55140 220 +0.40 -4.40
HG COPPER MAY3 342.65 -1.50 -0.44 -6.19
LME Alum 1919.00 0.00 +0.00 -7.34
SHFE AL FUT JUL3 14715 40 +0.27 -4.11
LME Zinc 1923.00 3.00 +0.16 -6.81
SHFE ZN FUT JUL3 14875 -670 -4.31 -4.31
LME Nickel 16215.00 -5.00 -0.03 -5.48
LME Lead 2093.75 3.75 +0.18 -10.52
SHFE PB FUT 14480.00 20.00 +0.14 -5.05
LME Tin 22930.00 -40.00 -0.17 -2.01
LME/Shanghai arb^ -261
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 6.2024 Chinese yuan)
(Reporting by Melanie Burton; Editing by Himani Sarkar and Tom
(firstname.lastname@example.org)(+65 6870 3017)(Reuters Messaging: email@example.com)
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