BLBG:Copper Swings Between Gains, Losses on Chinese Housing, Stocks
Copper swung between gains and losses in New York as investors weighed a sagging housing market in China, the world’s biggest consumer of the metal, against stockpiles at the lowest level since July 2009.
House prices had the worst performance in a year last month, China’s statistics bureau said yesterday. The Copper Development Association says construction generates about 40 percent of demand for the metal. Copper inventories tracked by the London Metal Exchange, down 29 percent this year, contracted for an 18th session.
“There are some worries about the real demand out of China, given the recent comments and signals about the housing market,” said Ole Hansen, a vice president of trading advisory at Saxo Bank A/S in Copenhagen.
Copper for May delivery advanced 0.1 percent to $3.8815 a pound by 7:36 a.m. on the Comex in New York after climbing as much as 0.3 percent and sliding as much as 0.6 percent. The LME’s three-month contract rose 0.3 percent to $8,535 a metric ton.
Immediate-delivery copper on the LME traded at a $32 premium to three-month metal, an eighth session of so-called backwardation that may indicate concern about supply.
Housing Curbs
China’s government this month reduced its target for annual economic growth to 7.5 percent from 8 percent, and foreign direct investment in the country dropped for a fourth month, a report showed. Relaxing limits on the nation’s housing market aimed at preventing a price bubble may cause “chaos,” Premier Wen Jiabao said March 14.
Still, the Chinese economy will avoid a so-called hard landing, according to Zhu Min, a deputy managing director at the International Monetary Fund. The nation’s pace of investment remains strong even after slowing, Zhu, a former deputy governor at China’s central bank, said in Hong Kong today.
Net-long positions in Comex copper, or bets on price gains, held by funds rose to 14,259 futures and options contracts as of March 13 from 13,615 a week earlier, according to the U.S. Commodity Futures Trading Commission. The metal has mostly traded between about $3.70 and $3.95 a pound for the past two months in New York, data compiled by Bloomberg show.
“The long position is hiding sizable longs and shorts,” Hansen said. “These rather big undecided positions mean that the price is ending up going nowhere.”
LME copper inventories dropped 0.5 percent to 262,575 tons after shrinking for a 24th week last week, daily exchange figures showed. Stockpiles monitored by the Shanghai Futures Exchange are at the highest level since at least 2003 after gaining for a third week to 227,276 tons.
Orders to draw copper from LME warehouses increased 1.3 percent to 87,975 tons.
Aluminum, tin, lead and zinc gained on the LME. Nickel was little changed.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
