SG:London copper edges up as US data sustains global growth hopes
Reuters reported that London copper firmed and was set to close higher for a second straight week after US jobs and inflation figures showed further signs of economic recovery but prices were capped as high stockpiles in China discouraged buyers.
Three month copper on the London Metal Exchange rose by 0.26% to USD 7,820 per tonne by 0247 GMT. Copper is set to close the week up around 1% but still remains in negative territory for the year, having dropped more than 6% from early February's 2013 peaks. The most traded July copper contract on the Shanghai Futures Exchange rose 0.65% to CNY 56,910 per tonne.
Mr Matt Fusarelli analyst at consultancy AME Group in Sydney said that "We see copper fully priced where it is at the moment. We are expecting a surplus this year of copper and we are now up several hundred thousand tonnes since the start of the year indicative of where the market is moving."
ShFE and LME copper stocks have climbed more than 200,000 tonnes or more than a quarter of combined total stocks so far this year. MCU STOCKS CU STX SGH AME expects prices to ease over the second quarter and close the year around USD 3.20 per pound.
The number of Americans filing new claims for unemployment benefits dropped for a third straight week last week, the latest indication the labor market recovery was gaining traction.
A second report from the Labor Department offered little reason to worry about a rise in inflation, with food prices at the wholesale level almost reversing January's increase and the cost of automobiles rising only marginally.
Other data on Thursday showed a spike in the cost of gasoline pushed up producer prices last month, but a lack of broad price pressures gives the Federal Reserve scope to maintain its very easy monetary policy.
Mizuho Corporate Bank said that ahead of today's consumer price index release from the United States, the market will be watching closely whether quantitative easing has impacted on inflation. The Fed has a target inflation of around 2.0%. Should CPI numbers post a big gain then it will be another round of USD buying, which would provide further consolidation to the belief that QE will be ending.
The bank said that any increase in the dollar could weigh on metals prices as a firmer dollar typically erodes metals demand because buyers with other currencies have to pay more for their metal.
