Copper gives up gains as China imports slump
Reuters
SHANGHAI - Copper prices were steady in thin trading, giving up early gains as China's October copper imports came in lower than expected while the country's copper output hit a record high.
China imported 263,109 tonnes of unwrought copper and semi-finished copper products, down 34 per cent from a month earlier after a surprise jump in September, signalling softening demand.
"Given the perception that China will continue to drive metals demand for some time, these kinds of numbers are slightly worrying. We've already got some pretty high stock levels out there," said Darren Heathcote, an analyst at Investec Bank in Australia.
Both Shanghai and London copper prices were trapped in narrow ranges in light trade.
Trading volume on London copper was 581 lots, compared to a typical 2,000 lots during Asian trading hours.
Shanghai's benchmark third-month copper futures contract edged up 30 yuan, or less than 0.1 per cent, to end at 50,770 yuan ($US7,437).
The most-active contract for February delivery rose 0.1 per cent to 50,910 yuan.
Three-month copper futures contract on the London Metal Exchange shed $US10 to $US6,520 a tonne by 1800 AEDT.
"The same problems remain -- investors are bullish on next year, but no one wants to take the initiative to push prices up," said a Shanghai-based trader.
"High inventories are hanging over, while consumption appears sluggish. But there isn't really downward momentum either, because of the bullish view on next year."
LME copper inventories kept rising on Tuesday, up 4,675 tonnes to a six-month high of 394,150 tonnes.
"It's difficult for consumption to catch up at such high price levels. Consumers simply don't want to buy," said Lin Yuhui, deputy general manager of Jinhui Futures, adding that buyers would be interested if prices dropped to 48,000 yuan.
"The current prices were mostly supported by the falling dollar, but pressure from the weak spot market is growing."
As copper imports fell, China's refined copper production hit a record high for the second straight month as producers geared up to meet their yearly output plans.
Supporting sentiment, a strike is brewing at Antamina, a major copper mine in Peru, as talks between the union and the company had broken down.
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