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    Copper Gains on Japanese Industrial Output, European Sentiment

    By Anna Stablum

    July 30 (Bloomberg) -- Copper rose for the first time in three days in New York and London as Japanese industrial output expanded, European consumer sentiment improved and Chinas central bank damped speculation it would curb lending.

    Japanese factory output increased for a fourth month, capping the fastest quarterly output expansion in more than a half century. European confidence in the economic outlook increased more than forecast in July, the European Commission in Brussels said. Chinas central bank said late yesterday it will maintain a moderately loose monetary policy. Metals tumbled yesterday on speculation bank loans would be limited.

    The month-on-month gains in demand are likely to be reasonably positive albeit from pretty low levels, Daniel Major, an analyst at RBS Global Banking & Markets in London, said by phone. We are going through stabilization in preparation for a rebound in growth.

    Copper for September delivery gained 5.45 cents, or 2.2 percent, to $2.532 a pound on the New York Mercantile Exchanges Comex division at 8:29 a.m. in New York. Copper for three-month delivery rose $125, or 2.3 percent, to $5,540 a metric ton on the London Metal Exchange.

    Even if China were to restrict loan growth rates it would simply mark a return to more normal lending growth from the exceptionally high growth rates during the first half of 2009, Goldman Sachs Group Inc. said in a report. Our Chinese economists expect the overall fiscal and monetary policy stance in China to remain conducive to economic growth. China is the worlds biggest copper consumer.

    Copper Forecasts

    Nomura International Plc raised its 2009 copper forecast by 10 percent to $4,586 a metric ton and its 2010 estimate by 33 percent to $6,614. Copper supply will fall short of demand this year and next, Nomura said in a report.

    The pace of western world economic growth in the second half of 2009 is likely to more than offset any lull in Chinese base metals buying, Michael Jansen, an analyst at JPMorgan Securities Ltd. in London, wrote in a report today.

    Copper stockpiles in LME-monitored warehouses fell for a second day, taking this years contraction to 18 percent. The stockpiles are the only ones to decline among the six main industrial metals traded by the bourse.

    Among other LME metals for three-month delivery, aluminum rose $46, or 2.6 percent, to $1,841 a ton. Zinc added 2.8 percent to $1,690 a ton. Lead gained 2.3 percent to $1,690 a ton. Nickel advanced 3.8 percent to $16,899 a ton. Tin rose 2.5 percent to $14,550 a ton.

    To contact the reporter on this story: Anna Stablum in London at astablum@bloomberg.net.

    Last Updated: July 30, 2009 08:45 EDT

    http://www.bloomberg.com/apps/news?pid=newsarchive&;sid=aZa2aZPiWK8M

  2. 288
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    Copper prices set to go down sharply for rest of year. Not good news for my Copper stocks :(

    Copper at week-low on China risks.

    July 30, 2009

    Article from: Reuters

    COPPER prices fell to their lowest level in a week as the US dollar firmed on risk aversion and investors fretted that China might reduce imports of the metal.

    Weak equities markets, a heavy build in US oil inventories and a drop in orders for durable US-made goods also weighed on commodities in general.

    Benchmark copper on the London Metal Exchange closed down $US115 at $US5415 a tonne. The metal, used in power and construction, hit a session low of $US5385 a tonne, down sharply from Monday's 10-month highs of $US5646.

    In US trade, copper for September delivery ended down US4.30 cents, or 1.7 per cent, at $US2.4775 a pound on the New York Mercantile Exchange's COMEX division.

    The session’s low was $US2.4500 -- which was a bottom since July 22.

    “There's concern that the market's got ahead of fundamentals for the time being,” said Matthew Zeman, head of trading at LaSalle Futures Group in Chicago.

    He said on-off sentiments about the global economy were off again on fears China may restrict lending in the second half, leading to a possible liquidity squeeze.

    “I wouldn't be surprised to see the September (COMEX) contract fall back to around $US2.25 to where we are right now,” Mr Zemand said.

    “It looks toppy. I think the path of least resistance is on the downside right now.”

    Record Chinese imports had propelled copper prices up around 80 per cent this year, but analysts expect imports will slow as China is now fully stocked with metal.

    The market has been growing more worried about an oversupply of base metals in China and prospects of rising stockpiles, said Daniel Major, an industry analyst at RBS Global Banking and Markets in London.

    “I think the market is just feeling a bit cautious on some of this material that's moved into China,” Major said.

    The US dollar climbed to a two-week high against the euro as investors sought a safe haven.

    US stocks fell amid worries that China's banks might be poised to hit the brakes on lending to stem market excesses, a move that could curb the global economic recovery.

    A larger-than-expected drop of 2.5 per cent in June for orders of US durable goods weighed further on the market.

    The latest data showed stocks of copper in LME warehouses fell 575 tonnes to total 278,350 tonnes. However, cancelled warrants -- material tagged for delivery out of warehouses -- fell by 1825 tonnes, meaning more material is available.

    LME stocks have been rising since mid-July, although they remain well short of February levels of around 500,000 tonnes.

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