Copper steady, inventory rise weighs

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    LONDON - Copper was steady on Friday, after the previous day's fall, balanced between investors who worry prices have risen too high given weak demand, and a weak dollar that is lending support to metal prices.

    The copper price has been moving within a $US500 range since the start of August as the market worries over uncertainties about the pace of recovery and prices have become prone to a correction after more than doubling since the start of the year.

    Copper for three months delivery on the London Metal Exchange was at $US6,270 a tonne by 1927 AEST, versus $US6,294 a tonne on Thursday.

    "There's a lot of good news (already) in that copper price, it has risen a lot," senior commodity strategist at Societe Generale Jesper Dannesboe said.

    "But as long as the euro/dollar is above $US1.45 copper will hold onto its gains."

    The dollar fell to a one-year low against a basket of currencies, making industrial metals cheaper for local currency holders.

    "We should get a correction in the prices since stocks are still rising and they're rising at a decent pace," Mr Dannesboe said.

    Inventory data is highlighting scarce demand. Copper stocks at warehouses monitored by the Shanghai Futures Exchange shot up 10,288 tonnes to 97,396 tonnes this week from the previous week, the highest level in more than two years with the rise far bigger than market expectations.

    On the LME, copper stocks have risen nearly 25 per cent since early July to stand at around 318,000 tonnes.

    "Copper could easily drop another $500," an LME trader said. "September's known as a month of sell-offs," he added.

    Moreover, China's August imports of unwrought copper and products fell 20 per cent from July, despite industrial data surprised on the upside in August.

    "There is a feeling that the restocking process may be coming to an end," commodities economist at National Australia Bank Ben Westmore said.

    "We are at a point now where industrial production is very strong but many manufacturers are well-stocked and have slowed their purchases."

    Traders will also look out for macro-economic data from another major copper consumer, the United States, due later on Friday.

    Lead steadied after tumbling more than 13 per cent and touched its lowest in two weeks in the previous session following a report by China's state-run research body Antaike saying the country's refined lead surplus is expected to grow this year and widen further in 2010.

    The battery material was last at $US2,130 a tonne versus $US2,120 a tonne on Thursday. Aluminium was almost unchanged at $US1,855 versus $US1,854.

    Steel making ingredient nickel was at $US17,300 a tonne versus $US17,200 a tonne, while zinc was firmer at $US1,933 a tonne from $US1,920.

    Tin was slightly higher at $US14,325/14,330 from $US14,150.

    The backwardation -- premium for cash material over three months delivery -- has widened to $US555 a tonne.

    LME data showed a dominant position holding 50-80 percent of the stock warrants.

    "Somebody's holding a large part of the stocks...which is troubling other investors as there could be a shortage of material," an LME trader said.;src=rss

  2. 6.5k

    Thanks Doggy Cobber


    Always posting good articles and Yep there's some recognition for ya..

    You're Good !!



    (on the good turps)


    :wink: :wink: :wink:

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