Chinese data buoys metals on LME

Print this page Posted on : 10-27-2007 by recycleinme.com

Industrial metals traded firmer in early London Metal Exchange business on Friday, supported by data showing strong Chinese demand for metals in the face of global economic uncertainty, analysts said.

Copper for delivery in three months, often considered a benchmark of the metals market and the real economy in general, was quoted $7,820/7,840 per tonne at 0917 GMT, up $55 or 0.7 per cent from Thursday’s close and more than $1,000 higher than at the start of the year.

Lead was up 1.3 per cent at $3,645 /3,665 per tonne.

The FTSE index was up around half a per cent, with mining shares BHP Biiliton, Xstrata and Rio Tinto were up between 1 and 2 per cent.

Metals have tracked equity markets recently, but market-specific data from China lifted prices on Friday.

“The import number were strong and that’s still keeping the complex up, particularly copper,” Merrill Lynch analyst Mr. Daniel Hynes said.

China’s copper imports in September were up 17 per cent on the previous month, customs data released on Thursday showed, while warehouse stocks monitored by the Shanghai Futures Exchange fell 11 per cent.

Ongoing strong demand for copper in China could offset fears that a slowdown in the US economy may lead at lower use of metals.

“China is really counteracting that weakness,” Mr. Hynes said. In contrast to the Shanghai data, copper stocks in warehouses monitored by the LME rose by 2,725 tonnes to 154,175 on Friday, taking the increase so far this month to almost 18 per cent. “Base metals price movements continue to reflect changing perceptions of global economic health,” said analyst at Barclays Capital in a report.

Aluminium was up $3 at $2,517/2,521 per tonne, and zinc was up $10 at $2,875/2,895 per tonne.

Tin was up $205 at 16300/16500 per tonne, and steelmaking raw material nickel was up 350 at $31,950/32,250 per tonne.

Source : Business Line