Copper prices slipped on Tuesday, as prospects of growing supplies overshadowed encouraging signs of health in the global economy, while zinc hovered at three-year highs on expectations of a tightening market.
Three-month copper
Data earlier this month showed manufacturing in the world's top metals user, China, expanded at its fastest clip in 18 months in July, while the U.S. economy has gathered pace, with the outlook for its labour market brightening.
The copper market is expected to register another year of surplus this year, in a move that is seen weighing on prices. Late last week, the world's top copper producer Freeport-McMoRan Incclinched a deal with the Indonesian government to allow the miner to resume copper concentrate exports.
The base metals complex could struggle to eke out significant gains for the remainder of the week ahead of key economic indicators due later in the week and international political risk, analysts said.
This week, second-quarter economic growth in the United States, a U.S. jobs report and an official reading on China's factory health are expected to show fresh signs that a global economic revival has taken hold.
"Investors surely want to wait for the big events.. such as the outcome of the FOMC (Federal Open Market Committee) and the U.S non-farm payroll data this week. No one wants to bet big," said Naeem Aslam, chief market analyst at Ava Trade.
"On top of that Russian sanctions are very much back on the forefront, and the new sanctions by the European Union, which could be announced as soon as tomorrow, are also weighing on the sentiment."
EU diplomats will try to agree on Tuesday on broader economic sanctions against Russia for its actions in Ukraine. Measures being considered include targeting capital markets, defence and sensitive technology. [ID:nL6N0Q34UN]
Benchmark zinctraded at a session peak of $2,416 a tonne, hitting its highest since August 2011 for a second consecutive day, boosted by uncertainty about supplies as the market is expected to move into a deficit. It later traded at $2,381 a tonne in official rings, down 1.2 percent.
Several top zinc mines are drying up, including Century in Australia, while a recovery in the construction industry would revive demand from galvanisers.
"The direction is right. It's probably gone a lot quicker than I expected, which opens it up for some profit-taking ... I wouldn't expect to see a significant sell-off," said ANZ strategist Daniel Hynes in Sydney.
In other metals, LME leadrose to $2,307, the highest since late February 2013. Prices moved into positive territory for the year in July and are now up almost 4 percent in 2014. It traded at $2,278 a tonne in official rings, down 1 percent.
Tinuntraded in official rings, was bid at $22,725 a tonne, up 0.3 percent. Aluminium , also untraded, was bid at $1,985 a tonne, down 1.4 percent. Nickel traded at $18,595 a tonne, down 1.1 percent.
In industry news, Goldman Sachs Group Inc'smetals warehousing unit is exploring its first foray into China and privately held C Steinweg has expanded capacity there, sources said, as a financing scandal in a major Chinese port fuels a scramble for market share.
Source: Reuters
Three-month copper
Data earlier this month showed manufacturing in the world's top metals user, China, expanded at its fastest clip in 18 months in July, while the U.S. economy has gathered pace, with the outlook for its labour market brightening.
The copper market is expected to register another year of surplus this year, in a move that is seen weighing on prices. Late last week, the world's top copper producer Freeport-McMoRan Inc
The base metals complex could struggle to eke out significant gains for the remainder of the week ahead of key economic indicators due later in the week and international political risk, analysts said.
This week, second-quarter economic growth in the United States, a U.S. jobs report and an official reading on China's factory health are expected to show fresh signs that a global economic revival has taken hold.
"Investors surely want to wait for the big events.. such as the outcome of the FOMC (Federal Open Market Committee) and the U.S non-farm payroll data this week. No one wants to bet big," said Naeem Aslam, chief market analyst at Ava Trade.
"On top of that Russian sanctions are very much back on the forefront, and the new sanctions by the European Union, which could be announced as soon as tomorrow, are also weighing on the sentiment."
EU diplomats will try to agree on Tuesday on broader economic sanctions against Russia for its actions in Ukraine. Measures being considered include targeting capital markets, defence and sensitive technology. [ID:nL6N0Q34UN]
Benchmark zinc
Several top zinc mines are drying up, including Century in Australia, while a recovery in the construction industry would revive demand from galvanisers.
"The direction is right. It's probably gone a lot quicker than I expected, which opens it up for some profit-taking ... I wouldn't expect to see a significant sell-off," said ANZ strategist Daniel Hynes in Sydney.
In other metals, LME lead
Tin
In industry news, Goldman Sachs Group Inc's
