RTRS: METALS-Copper prices drop as demand concerns persist
LONDON, June 4 (Reuters) - Copper fell more than 1 percent
on Thursday as a spate of weak data kept demand concerns alive
and tempered a recent pick-up in market sentiment.
Copper for three-months delivery MCU3 on the London Metal
Exchange was $4,885 a tonne in open outcry trade, from a close
of $4,915 on Wednesday. It hit a session low of $4,855.
The metal used extensively in power and construction rose
above $5,000 earlier this week as stronger data fanned
speculation the global economy may be convalescing, but weaker
U.S. data on Wednesday cooled the optimism.
Analysts maintain the economic outlook is improving as the
rate of bad news slows but view the recent market gains as over
zealous.
"People don't expect a dramatic, swift recovery, but they do
expect a recovery," Standard Bank analyst Leon Westgate said.
"People are now brave enough to look a bit further forward
now that things appear to have bottomed. China's economy is
growing and the economic data is not great but it's not getting
worse," Westgate added.
As well as weak U.S. jobs data, the service sector, which
accounts for about 80 percent of U.S. economic activity, shrank
for the eighth straight month in May. But the rate of
contraction slowed. [ID:nL480256]
Other data showed new orders received by U.S. factories
rebounded in April but the previous month's figure was sharply
revised downwards to show a steeper drop. [ID:nN0310266]
ALUMINIUM STOCKS FALL
Aluminium MAL3, used in transport and packaging, stood at
$1,472 from $1,482.
Inventory data offered some respite for the metal used in
transport. Stocks fell for the second session in a row, dropping
6,900 tonnes to break a relentless rise since April 20 that has
brought levels to above 4.2 million tonnes.
But the outlook for aluminium is weak as potential
production restarts in China threaten to flood the market with
material and as the auto sector continues to languish.
"I'm worried that on any pick-up in prices, a lot of
facilities in China could get restarted, and that could temper
any further (price) rise," said Charles Kernot, a mining analyst
at Evolution Securities.
Among other industrial metals, zinc MZN3 was at $1,527
from 1,535, battery material lead MPB3 stood at $1,580/1,581
from $1,615.
Tin MSN3 was at $14,450/14,460 from $14,500. The metal
remained in a high backwardation -- a premium for nearby
material over three-months contracts -- above $200. Signalling a
potential squeeze, data shows a dominant position controlling
about 90 percent of cash warrants on LME stocks.
Nickel MNI3 traded at $13,945 from $14,200.
Metal Prices at 1227 GMT
Metal Last Change Pct Move End 2008 Ytd Pct
move
COMEX Cu 221.30 0.15 +0.07 139.50 58.64
LME Alum 1475.00 -7.00 -0.47 1535.00 -3.91
LME Cu 4877.00 -173.00 -3.43 3060.00 59.38
LME Lead 1579.00 -36.00 -2.23 999.00 58.06
LME Nickel 13900.00 -720.00 -4.92 11700.00 18.80
LME Tin 14350.00 -150.00 -1.03 10700.00 34.11
LME Zinc 1518.00 -17.00 -1.11 1208.00 25.66
SHFE Alu 13010.00 -65.00 -0.50 11540.00 12.74
SHFE Cu* 39490.00 -1150.00 -2.83 23840.00 65.65
SHFE Zin 13170.00 -160.00 -1.20 10120.00 30.14
** 1st contract month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
