FXS: UPDATE 4-Copper steady as softer demand offset by dollar
LONDON, Oct 9 (Reuters) - Copper was steady on Thursday as concerns about softer demand were partly offset by a slightly weaker dollar and a rebound in equities markets.
'Relative to recent weeks, there is an air of greater stability around, however temporary,' said Steve Hardcastle, analyst at brokerage house Sucden.
Three-month copper on the London Metal Exchange was down at $5,345 at 1031 GMT, after earlier touching a low of $5,220 on consumption worries. The metal closed at $5,240 on Wednesday.
Copper prices have dropped about 20 percent this year and closed down 4 percent on Wednesday.
'Metals prices look likely to fall further as expectations for demand fall away,' John Meyer, analyst at Fairfax, said in a research report.
'Metals prices are taking their lead from equity markets in the current environment as an indicator for lower consumption and lower funding of industrial growth,' Meyer said.
European stocks recovered somewhat on Thursday from steep losses in the previous session after fresh moves by governments and central banks to ease the financial crisis.
Copper, mainly used in the construction and power industries, posted a brief recovery on Wednesday in response to the coordinated strike by the world's central banks to halt the financial crisis.
'Although all attention is firmly focused on the credit crunch, rate cuts and the financial market bail outs, the deterioration of the real economy has not escaped traders of industrial commodities,' UBS (nyse: UBS - news - people ) analyst John Reade said in a note.
'A worsening outlook for demand for metals and energy has prompted a sell-off in all commodities that are sensitive to global economic growth,' he said.
The market is also awaiting further details on the Shanghai Futures Exchange's move to compulsorily close positions on 10 copper futures contracts.
Most Shanghai copper contracts were suspended after prices fell by their daily limits for three days running. The exchange also raised margins on zinc.
Aluminium was at $2,289 a tonne from $2,250.
Zinc, lead, tin and nickel were all supported by the weaker dollar and expectations that prices near or below the marginal costs of production will likely force more output cuts from loss-making mining companies.
The Chinese local government closed smelters with annual lead and zinc production capacity of 500,000 tonnes after an accidental discharge of arsenic in the Guangxi region of southwestern China, the China Securities Journal said.
Lead and zinc prices were boosted by the move, which is expected to cut China's lead and zinc output by 20 percent in the fourth quarter.
Lead rose to $1,635 from $1,575, while zinc increased to $1,505 a tonne from $1,430.
Nickel was unchanged at $13,200 a tonne. The metal earlier fell to $12,625, its lowest level since December 2005, on concerns about demand from stainless steel producers.
Tin, seen as the metal with the strongest fundamentals, was also unchanged at $14,900 a tonne.
Metal Prices at 1037 GMT
Metal Last Change Pct Move End 2007 Ytd Pct
move LME Cu 5336.00 96.00 +1.83 6670.00 -20.00 SHFE Cu* 0.00 -45720.00 -100.00 56880.00 -100.00 LME Alum 2282.00 32.00 +1.42 2403.00 -5.04 SHFE Alu* 14165.00 -65.00 -0.46 18180.00 -22.08 COMEX Cu** 236.65 0.00 +0.00 303.05 -21.91 LME Zinc 1499.00 69.00 +4.83 2370.00 -36.75 SHFE Zinc* 12285.00 -445.00 -3.50 18950.00 -35.17 LME Nick 13050.00 -150.00 -1.14 26350.00 -50.47 LME Lead 1627.00 52.00 +3.30 2550.00 -36.20 LME Tin 14825.00 -75.00 -0.50 16400.00 -9.60 ** 1st contract month for COMEX copper * 3rd contact month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Reporting by Julie Crust; editing by Christopher Johnson) Keywords: MARKETS METALS
