SG:London copper up but set for biggest weekly drop in four
Reuters reported that London copper rose on signs of resurfacing Chinese demand and a US recovery, but worries over a Cypriot default and a deepening economic malaise in the euro zone put the metal on track for its biggest weekly loss in a month.
Copper prices fell to 7 month lows this week, triggering some restocking by Chinese consumers, but concerns over euro zone contagion have eclipsed signs of improving demand both from top consumer China and through a nascent recovery in the US housing market.
Three month copper on the London Metal Exchange rose 0.79% to USD 7,633.75 per tonne by 0249 GMT, reversing losses from the previous session, when it fell half a percent.
Copper prices are headed for a drop of 1.5% this week, in the biggest decline since late February. Prices are recovering from a seven-month trough at USD 7,486.25 per tonne hit on Tuesday but are still down more than 3% on the year. The most traded July copper contract on the Shanghai Futures Exchange fell 0.46% to CNY 55,770 per tonne.
Mr Jonathan Barratt CEO of Barratt's Bulletin said that "The right outlook for copper is neutral to bearish, while the market focuses on what is happening in Europe. I still think we're still going sideways."
A pick up in prices will be led by an improvement in demand. If we're not seeing draws in copper inventories but we're seeing builds then it's fairly apparent people aren't making the orders they need to for resumption in demand in the second and Q3.
The European Union gave Cyprus till Monday to raise the billions of euros it needs to secure an international bailout or face a collapse of its financial system that could push it out of the euro currency zone.
