BR:Copper steady, World Bank growth forecasts support
SYDNEY : London copper was steady on Wednesday, with demand easing ahead of the Lunar New Year, but prices were buttressed by improving economic optimism after the World Bank raised its forecast for global growth.
Copper prices have been stuck in a rut so far in 2014, capped by expectations that supply will climb as the year gets underway but underpinned by a shortfall of available metal in physical markets.
"Definitely there is less demand for copper at the moment. Because of seasonal reasons, demand for all commodities is going to weaken which will be the case until early February," said analyst Wan Ling at metals consultancy CRU in Beijing.
Three-month copper on the London Metal Exchange had edged down 0.1 percent to $7,270 a tonne by 0246 GMT from the previous session when it slipped 0.7 percent. The most-traded March copper contract on the Shanghai Futures Exchange eased 0.3 percent to 51,510 yuan ($8,500) a tonne.
China is the world's top copper consumer, accounting for around 40 percent of global refined demand. Lunar New Year holidays kick off on January 31 this year.
Pan Pacific Copper, Japan's biggest smelter, said on Wednesday it would not sign a long-term contract for copper processing fees with global miner BHP Billiton in 2014, after they couldn't agree on terms.
Pan Pacific may be betting on ample supply to fill its needs this year, given the global copper market is expected to be in a surplus, traders said.
Cash copper remained at a premium against the benchmark, signalling a shortfall of available supply, although the differential eased by more than $10 on Tuesday to $24.75 from 19-month peaks hit the day before.
Improving prospects for metals demand, the World Bank on Tuesday raised its forecast for global growth for the first time in three years as advanced economies started to pick up pace, led by the United States.
In other metals, LME nickel prices were also a tad softer, easing 0.1 percent to $14,324 a tonne, having advanced nearly 1 percent on Tuesday and more than 7 percent since Thursday, after new laws banning exports of ore from Indonesia came into force at the weekend. Also weighing on commodities are worries the Federal Reserve will aggressively curtail stimulus measures, withdrawing capital available for commodities investment.
