ENM: Copper gains on US data; dollar, supply worries weigh
SHANGHAI: Copper prices edged up on Friday after a slew of positive US data infused optimism about a global economic recovery, but gains were kept in check by a firmer dollar and worries over abundant copper supply in China.
The euro fell to its lowest in a year after Greece's budget gap last year turned out to be worse than feared, prompting Moody's Investors Service to downgrade Greek government debt by a notch.
On the brighter side, data released on Thursday showed the number of US workers filing new claims for jobless aid fell last week while producer price data showed inflation is muted.
A rise in sales of previously owned homes in March after three months of declines added to growing optimism the world's largest economy is on a moderate recovery path.
"Some Chinese speculators have been buying yesterday and today, possibly because some speculative money is pulling out of the property market and channeled into metals," said a Shanghai-based trader.
Speculators were betting on a further price rally before the strong seasonal consumption ebbs in late May, the trader added.
Shanghai's benchmark third-month copper futures contract rose 0.4 per cent to 60,920 yuan ($8,925) a tonne by 0453 GMT, heading for a third consecutive week of decline.
The most-active contract for August delivery was up 0.6 per cent at 61,170 yuan a tonne.
Three-month copper on the London Metal Exchange rose $31.50 to $7,723.50, on course for a 0.5 per cent weekly decline.
"It would be hard to imagine copper will hit a new record high soon," said a trader based in eastern province of Zhejiang.
"Right now it is building a top, and prices are likely to go through a correction, but chances are slim that the correction would be deep."
LME copper is still rangebound between $7,851 and $7,610.25 per tonne and will likely rebound to $7,816, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
LME copper prices lost nearly 4 per cent from a peak of $8,043.75 hit on April 12, and Shanghai also lost about 4 per cent during the period.
Spot supply in China remains abundant, even though consumption has been strong due to the recovering export business, traders and analysts said.
But copper imports are expected to slow down in April, as the arbitrage window between Shanghai and LME closed.
LME aluminium was down $8 to $2,312 a tonne, after rebounding earlier from a sharp two-day fall of about 3 per cent. Shanghai aluminium was flat at 16,620 yuan a tonne.
