RTRS: Copper falls for third day on dollar, China demand
* Euro falls vs. dollar on euro debt worries
* Metals market also still reacting to China growth view
* Coming up: U.S. Redbook retail sales, 1355 GMT
By Susan Thomas
LONDON, March 6 (Reuters) - Copper fell for a third straight day on
Tuesday, pulled lower by a stronger dollar and concerns that slower growth in
China will curb demand from the world's biggest consumer of the industrial
metal.
China, the world's second-largest economy, cut its economic growth goal to
an eight-year low of 7.5 percent on Monday, sending global equities and
commodities lower.
Investors appeared to have used the lower target to take profits on long
positions in commodities like copper and currencies linked to global growth,
analysts said.
Three-month copper on the London Metal Exchange was untraded in
official rings, but bid at $8,342, down from $8,505 at the close on Monday.
"The market reacted quite badly to the downward revision of forecasts in
China, but we think it is just an excuse to move lower," said Gianclaudio
Torlizzi, a partner in metals consultancy T-Commodity.
"We see this as an opportunity to buy. We're short now, but we'll start
buying copper at $8,000."
The euro slipped towards a two-week low and higher-yielding currencies fell
on Tuesday as worries over euro zone debt and the global economy made investors
reluctant to buy riskier assets, supporting safe havens like the dollar and yen.
A stronger dollar makes commodities priced in the U.S. unit more expensive
for holders of other currencies.
"The market is very unsure on the direction of the euro/dollar," Torlizzi
said. "You cannot be bullish on euro/dollar at the moment. I think we will reach
a point in the following days when we see euro/dollar at a lower level than the
current one and that will push metals lower."
The euro is likely to remain under pressure, with renewed concerns that
Greece and private bondholders will not meet a Thursday deadline to complete a
debt swap, potentially opening the way for a messy default.
DECLINE
The decline in financial markets came despite data on Monday showing the
U.S. services sector expanded at its quickest pace in a year, suggesting
investors were more concerned about what is happening in China and Europe than
the sustained improvements in the U.S. economy.
Credit Suisse said the current mixed bag of economic indicators in the
United States and Europe may be fuelling the recent price declines in industrial
metal prices.
"We think the sector needs confirmation from hard data that the economic
recovery remains on track. In this context, U.S. non-farm payroll data will be
important," the bank said, adding a strong number could end recent metals price
falls.
The government's jobs report for February, due on Friday, is expected to
show non-farm payrolls added 210,000 jobs last month, according to economists
polled by Reuters, after gaining 243,000 in January.
Signals from the physical base metals markets do not offer much to cheer
about, with a slow improvement in buying following the New Year, Barclays
Capital analyst Gayle Berry said in a research note.
"Physical premiums are low, time spreads are weak, SHFE (Shanghai Futures
Exchange) inventories have been rising and...stainless producers are reducing
output," Berry said.
"Indeed, we understand that slower demand for primary nickel and NPI (nickel
pig iron) has resulted in a build in nickel port ore stocks."
Traders and analysts told Reuters on Tuesday that China's nickel consumption
may drop in March and imports are likely to take a hit as stainless steel
producers, the top users of the metal, cut output.
Nickel was $18,850 in official rings, down from $19,075 at the close
on Monday.
Tin, untraded in rings, was $22,650 from $23,050 at Monday's close
while zinc, also untraded, was at $2,030 from $2,087.
Battery material lead was $2,095 in rings from $2,146 at the close
on Monday and aluminium was $2,248 from $2,290.