RTRS: Copper up, U.S. recovery eclipses China demand woes
(Reuters) - Copper rose on Monday as an improved outlook in the U.S., the world's largest economy overshadowed concern about demand in top consumer China, where the key property sector has cooled.
Benchmark three-month copper on the London Metal Exchange was up 0.35 percent at $8,540 per ton in official midday rings, from $8,510 at the close on Friday. The metal lost nearly 1 percent last week and has been largely range-bound for the past two weeks.
It gained nearly 12 percent in the first two months of the year as central banks in the developed world pumped money into their economies, China restocked and risks related to Europe's debt crisis receded.
"We had a strong high in January and then China got to the new year and its a traditional seasonal lull (in demand) so things calmed down and copper stayed range bound," said VTB Capital analyst Andrey Kryuchenkov.
"When China comes back, and they will come back, copper is set to benefit. (Also) the U.S. economy is fairly positive, that has helped equities and is good as far as base metals are concerned."
Denting copper, Chinese home prices fell in February from January for a fifth consecutive month and are expected to continue heading lower in coming months.
A cooler property market not only depresses demand for base metals as construction materials, but also dampens consumption from the home appliances sector, another key consumer of copper.
China cut its growth target for 2012 earlier this month, but its top planning agency has vowed to keep relatively fast growth as its economic policy priority.
In the U.S. meanwhile, a spate of recent data has shown a nascent economic recovery, and some in the market are growing increasingly hopeful that the recovery will gather pace.
"The discussion in the metals markets recently revolved around the outlook for the Chinese economy and Chinese metals demand. This week, the focus could shift to the Western World, with U.S. housing data on the calendar," said Credit Suisse in a note.
"We believe that the data will show a moderate improvement from very low levels of activity. Combined with still falling metals inventories at the LME, we think this could open the way for moderate price gains."
