Copper dipped on Monday as investors worried about high oil prices and waited for further signs of U.S. growth, but the metal was on track for its second straight monthly gain on tight supply and hopes of solid demand from China.
China purchasing managers' indices (PMIs) for manufacturing and services are expected to confirm on Tuesday that the world's second-largest economy is stabilising thanks to Beijing's measures to shore up growth.
Earlier, local China media said the country's banking regulator was relaxing the rules for calculating banks' loan-to-deposit ratios in a bid to release more cash into the system to support the real economy.
Investors are also betting on a rebound in the United States, with the non-farm payrolls on Thursday expected to show 213,000 jobs were added in June, marking a fifth straight month of gains above 200,000.
"After a very weak first quarter, the U.S. economy is gaining steam and so is the Chinese economy. (Also) the availability of copper has been very low. I think we can test $7,300 over the next three months," said Gianclaudio Torlizzi, partner at metals consultancy T-Commodity.
He was less bullish on the direction of copper prices in the near term, however: "The price now has to discount a potential oil spike, so in (the) following days the market will test support between $6,700 and $6,800," said Torlizzi.
A Sunni insurgency in northern Iraq has driven oil prices as high as $115 a barrel in the past month and is raising worries about global growth. Some of last week's first-quarter U.S. data also underlined doubts about growth. [O/R] [MKTS/GLOB]
Three-month copper on the London Metal Exchangewas last bid at $6,932 a tonne in official midday rings, down 0.26 percent on the day.
Copper hit its highest in more than three months on Friday, and is on track to log a one-percent gain in June, adding to May's three-percent advance and paring the year's losses to around 5 percent.
Data showed euro zone inflation in June remained low at 0.5 percent, confirming expectations the European Central Bank will keep policy loose for longer, and underpinning demand for risky assets.
Shanghai Futures Exchange copper stocks climbed in Friday's weekly report, but remain near 3-1/2 year lows, while LME stocks are around 150,000 tonnes, near the smallest in six years.
The global copper market was expected to swing into a surplus in 2014 for the first time in four years, but a ban on ore exports from Indonesia and lower-than-expected metal production in China has curbed supply.
Reflecting investor optimism over copper prices, hedge funds and money managers switched the copper market into a net long position in the latest week, the CFTC Commitments of Traders report showed
In other metals, LME zinc pricestraded up 0.34 percent in rings at $2,198 a tonne, having earlier hit a high of $2,183.25 a tonne, its highest since mid-February 2013.
Zinc is set to outperform other metals for June, with gains of more than 7 percent, also boosted by tight supply.
Reflecting distress in the spot market, cash zinc prices moved to a premium against three-month contracts on Monday for the first time in a month.
Zinc in the West has been supported by deteriorating ore grades and the closure of big mines, while the story is not so bullish in Asia, one trader said, given that higher LME prices mean it is no longer profitable to import into China.
Tintraded down 2.45 percent in rings at $21,875 a tonne, having earlier hit a low of $21,850 a tonne, its weakest since late January this year.
Indonesia's biggest tin miner PT Timahreported on Monday a 25 percent fall in first-quarter net profit, hurt by lower tin prices.
Aluminiumtraded down 0.71 percent in rings at $1,883.50 a tonne, lead was down 0.74 percent at $2,158 a tonne, while nickel traded down 0.27 percent at $18,800 a tonne.
Source: Reuters
China purchasing managers' indices (PMIs) for manufacturing and services are expected to confirm on Tuesday that the world's second-largest economy is stabilising thanks to Beijing's measures to shore up growth.
Earlier, local China media said the country's banking regulator was relaxing the rules for calculating banks' loan-to-deposit ratios in a bid to release more cash into the system to support the real economy.
Investors are also betting on a rebound in the United States, with the non-farm payrolls on Thursday expected to show 213,000 jobs were added in June, marking a fifth straight month of gains above 200,000.
"After a very weak first quarter, the U.S. economy is gaining steam and so is the Chinese economy. (Also) the availability of copper has been very low. I think we can test $7,300 over the next three months," said Gianclaudio Torlizzi, partner at metals consultancy T-Commodity.
He was less bullish on the direction of copper prices in the near term, however: "The price now has to discount a potential oil spike, so in (the) following days the market will test support between $6,700 and $6,800," said Torlizzi.
A Sunni insurgency in northern Iraq has driven oil prices as high as $115 a barrel in the past month and is raising worries about global growth. Some of last week's first-quarter U.S. data also underlined doubts about growth. [O/R] [MKTS/GLOB]
Three-month copper on the London Metal Exchange
Copper hit its highest in more than three months on Friday, and is on track to log a one-percent gain in June, adding to May's three-percent advance and paring the year's losses to around 5 percent.
Data showed euro zone inflation in June remained low at 0.5 percent, confirming expectations the European Central Bank will keep policy loose for longer, and underpinning demand for risky assets.
Shanghai Futures Exchange copper stocks climbed in Friday's weekly report, but remain near 3-1/2 year lows, while LME stocks are around 150,000 tonnes, near the smallest in six years.
The global copper market was expected to swing into a surplus in 2014 for the first time in four years, but a ban on ore exports from Indonesia and lower-than-expected metal production in China has curbed supply.
Reflecting investor optimism over copper prices, hedge funds and money managers switched the copper market into a net long position in the latest week, the CFTC Commitments of Traders report showed
In other metals, LME zinc prices
Zinc is set to outperform other metals for June, with gains of more than 7 percent, also boosted by tight supply.
Reflecting distress in the spot market, cash zinc prices moved to a premium against three-month contracts on Monday for the first time in a month.
Zinc in the West has been supported by deteriorating ore grades and the closure of big mines, while the story is not so bullish in Asia, one trader said, given that higher LME prices mean it is no longer profitable to import into China.
Tin
Indonesia's biggest tin miner PT Timah
Aluminium
Source: Reuters
