LME copper seen coming under pressure

Print this page Posted on : 06-27-2009 by recycleinme.com

Copper steadied on Friday as investors digested a recent mixed bag of data and weighed expectations of economic recovery against weak fundamentals.

Copper for three-month delivery on the London Metal Exchange was at $5,125 a tonne by 0940 GMT from a close of $5,130 on Thursday. It traded between a range of $5,062 and $5,130, having earlier flirted with a one-week high.

An aggressive buying exercise from China, the world's top copper consumer, has helped prices of the metal rise by more than 66 per cent so far this year. But analysts warn this floor is falling away as China winds down its restocking process.

''We're going to pull back, we've run ahead of ourselves a little bit,'' said Mr Andrey Kryuchenkov, an analyst at VTB Capital. A traditionally slower demand season in China in the next two months will likely add further pressure to prices.

''We could have another push on copper if Chinese buying comes back in the fourth quarter. You need Chinese buying to come again to help this market, because demand won't come yet from the US or Europe,'' he added

''Copper is the king still, it's going to up, but for now we're going to sit here and wait. Hopefully China can use up those stocks quickly.''

Among other industrial metals, aluminium, used in transport and packaging, was at $1,679 from $1,684.

Zinc was at $1,622 from $1,643 and battery material lead was at $1,744 from $1,738. Tin traded at $14,850 from $14,825 and nickel was at $15,800 from $15,625.

Source : Business Line