RTRS:METALS-Copper gains after Chinese data, tightening move
* China's inflation high but within market expectations
* Coming up: U.S. PPI, retail sales, May; 1230 GMT
(Recasts, updates prices, adds comment, pvs Shanghai)
By Marie-Louise Gumuchian
LONDON, June 14 (Reuters) - Copper rose on Tuesday,
absorbing another monetary policy tightening move in China, as
economic data from the world's top consumer of the metal eased
global growth concerns and boosted risk appetite.
Benchmark copper on the London Metal Exchange CMCU3 was at
$9,023 a tonne at 0930 GMT from a close of $8,910 on Monday.
China's inflation accelerated to 5.5 percent in May, but was
in line with expectations. Industrial output, with a rise of
13.3 percent, was also in line with forecasts. [ID:nL3E7HE06Q]
Beijing increased the reserve requirement ratio for its
commercial lenders by another 50 basis points, hours after the
data, its sixth increase this year. [ID:nB9E7EM01P]
"The impact of the reserve requirement ratio rise was
limited. I think more market players are looking at the economic
data itself, which came in line," Commerzbank analyst Daniel
Briesemann said. "(The data) is being interpreted as quite good
... But nevertheless there is still the need to take on more
measures to fight inflation."
China is the world's top copper consumer. Other data showed
its refined copper output dropped 3.3 percent on the month in
May after falling 3.4 percent in April, due to reduced supply of
scrap and the country's power shortages. [ID:nL3E7HE0WI]
The euro gained versus the dollar. A weaker dollar makes
metals cheaper for holders of other currencies. [FRX/]
Investors will also watch out for U.S. data due later in the
day, including retail and auto sales, and producer prices, which
the market will scour for clues to the magnitude and duration of
the slowdown in the world's largest economy. [ID:nL3E7HA1UX]
Economists polled by Reuters do not believe that the United
States will slide back into recession and expect activity to
pick up in the second half of the year. [ID:nN13186018]
CHILE STRIKE
Also lending support to copper prices was a three-week
contractor strike at the world's No. 5 copper mine, Chile's El
Teniente, which Codelco's chief executive said will hit future
output as fresh violence raised the spectre of a prolonged
disruption. [ID:nN13288883]
Copper inventories at LME warehouses fell further away from
one-year highs, down by 2,075 tonnes to 473,675 tonnes.
MCU-STOCKS
Aluminium CMAL3 traded at $2,607 from $2,590 a tonne.
Production of primary aluminium in China rose 5.3 percent on
the month in May to hit a record for the third consecutive
month, as new capacity came on stream. [ID:nL3E7HE0WI]
Norsk Hydro's (NHY.OL: Quote) chief financial officer said that
financing deals were helping to drive aluminium prices but they
still had performed poorly compared with other base metals.
[ID:nLDE75D0JZ]
Tin CMSN3 traded at $25,300 from $24,795 a tonne, having
hit its lowest since December at $24,510.
"The run in tin prices earlier this year to a series of
record highs led to an increase in exports from Indonesia and
China and consumer destocking," Standard Bank said in a note.
"The result has been a steady rise in LME stocks which has
weighed on both sentiment and prices, and has led to investors
to liquidate long positions. What was an overextended and
unsustainable market a few months ago is now feeling more
orderly and prices are now better reflecting fair value."
Zinc CMZN3 traded at $2,260 from $2,248 a tonne and lead
CMPB3 was at $2,565.25 from $2,535 a tonne.
Nickel CMNI3 traded at $22,372 from $22,275 a tonne.
Volatility boosted the marketing arm of commodities trader
Glencore (GLEN.L: Quote), which saw operating profit jump 45 percent in
the first quarter. It said it sees demand for commodities
remaining healthy. [ID:nLDE75C0JN]
Metal Prices at 0933 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices
in yuan/T
Metal Last Change Pct Move End 2010 Ytd Pct
move
COMEX Cu 407.95 4.50 +1.12 444.70 -8.26
LME Alum 2589.00 -30.00 -1.15 2470.00 4.82
LME Cu 8910.00 -28.00 -0.31 9600.00 -7.19
LME Lead 2535.00 0.00 +0.00 2550.00 -0.59
LME Nickel 22250.00 -25.00 -0.11 24750.00 -10.10
LME Tin 24795.00 -605.00 -2.38 26900.00 -7.83
LME Zinc 2246.00 -2.00 -0.09 2454.00 -8.48
SHFE Alu 17100.00 30.00 +0.18 16840.00 1.54
SHFE Cu* 67700.00 510.00 +0.76 71850.00 -5.78
SHFE Zin 17420.00 30.00 +0.17 19475.00 -10.55
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
