London copper opened flat on Monday after a two percent gain last week, stalling on news that major miner Freeport was set to resume concentrate exports from Indonesia after a six-month halt.
Freeport-McMoRan Incclinched a deal with the Indonesian government on Friday allowing the miner to resume copper concentrate exports from the country, effectively ending a six-month tax dispute and paving the way for more miners to follow suit.
A resumption in exports could help ease a significant shortage in refined supply for the first part of the year, but the market would still likely experience a deficit this year, said Helen Lau, senior mining analyst at UOB-Kay Hian Securities in Hong Kong.
"The Freeport export will not really change the global supply picture, it is too small," she said.
Freeport exports should inject around 110,000 tonnes of metal to the market, easing a 400,000 tonne deficit seen in the first five months of the year, she said.
"In the second half, the demand situation may improve a little. I see support at $7,000 but I’m not expecting significant gains to $7,500 because we still need to take into consideration China is slowing."
Three-month copper on the London Metal Exchangewas little changed at $7,124.75 a tonne by 0301 GMT from the session before, when it notched a 0.7 percent drop. Prices rose two percent last week for the fifth weekly advance in six.
The most-traded September copper contract on the Shanghai Futures Exchangeslipped by 0.6 percent to 50,530 yuan
($8,200) a tonne, falling from an 11-day high hit the session before.
Later this week, Wednesday's U.S. gross domestic product reading and jobs data on Friday will help markets to judge the strength of the economy's rebound and the likely speed of the Federal Reserve's return to more conventional monetary policy. The Fed meets on Tuesday and Wednesday.
A mixed reading on the health of U.S. business investment on Friday suggested the economy may not have rebounded as strongly in the second quarter as previously believed, but it offered hope for the rest of 2014.
Data from Beijing is expected to confirm China's economy picked up in July.
Hedge funds and money managers trimmed net-long positions in copper markets, the Commodity Futures Trading Commission said on Friday.
Speculators lowered net long positions in copper from more than eight year highs, by 4,888 lots to decrease the industrial metal's net long to 44,107 contracts.
In other metals, LME leadapproached its highest in 7 months, climbing just dollars short of its late December peak of $2,289 a tonne.
Lead has been piggy-backing on gains in sister metal zinc, which on Friday printed its fifth consecutive three-year top on prospects of a shortage in raw ore supply. In Shanghai, lead prices careened up more than 3 percent.
"It's nothing fundamental," said a strategist at a bank in Shanghai. "It's just reacting to the gains in zinc."
Source: Reuters
Freeport-McMoRan Inc
A resumption in exports could help ease a significant shortage in refined supply for the first part of the year, but the market would still likely experience a deficit this year, said Helen Lau, senior mining analyst at UOB-Kay Hian Securities in Hong Kong.
"The Freeport export will not really change the global supply picture, it is too small," she said.
Freeport exports should inject around 110,000 tonnes of metal to the market, easing a 400,000 tonne deficit seen in the first five months of the year, she said.
"In the second half, the demand situation may improve a little. I see support at $7,000 but I’m not expecting significant gains to $7,500 because we still need to take into consideration China is slowing."
Three-month copper on the London Metal Exchange
The most-traded September copper contract on the Shanghai Futures Exchange
($8,200) a tonne, falling from an 11-day high hit the session before.
Later this week, Wednesday's U.S. gross domestic product reading and jobs data on Friday will help markets to judge the strength of the economy's rebound and the likely speed of the Federal Reserve's return to more conventional monetary policy. The Fed meets on Tuesday and Wednesday.
A mixed reading on the health of U.S. business investment on Friday suggested the economy may not have rebounded as strongly in the second quarter as previously believed, but it offered hope for the rest of 2014.
Data from Beijing is expected to confirm China's economy picked up in July.
Hedge funds and money managers trimmed net-long positions in copper markets, the Commodity Futures Trading Commission said on Friday.
Speculators lowered net long positions in copper from more than eight year highs, by 4,888 lots to decrease the industrial metal's net long to 44,107 contracts.
In other metals, LME lead
Lead has been piggy-backing on gains in sister metal zinc
"It's nothing fundamental," said a strategist at a bank in Shanghai. "It's just reacting to the gains in zinc."
