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Copper capped in range, focus on US economy
LONDON - Industrial metals were seen trading in ranges on Wednesday, nervous about the possibility of a US recession while the market was eagerly awaiting economic data from the United States.
- PUBLISHED: Wed 28 Nov 2007, 4:50 PM UPDATED: Sat 4 Apr 2015, 11:23 PM
Copper for delivery in three months was down $35 at $6,570/6,590 a tonne at 1006 GMT after easing 1.6 percent on Tuesday. Prices have fallen by nearly 20 percent since October and consumer buying was seen creeping in at these levels.
'It has been pretty choppy but we are starting to see signs of increasing consumer interest at these lower prices,' analyst Daniel Hynes at Merrill Lynch told Reuters.
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Traders said the metal complex could be in for another range-testing day with bargain hunters supporting prices, while economic growth concerns in the United States capped any gains.
'Copper looks caught in a broad range between $6,400 and $6,800,' an LME trader said.
Copper and other industrial metals have been knocked by worries about a US economic slowdown and the possibility of recession.
'Overall, we could see several more weeks of rather weak prices characterize trading in metals, as a strategy of selling the rallies will probably be the preferred course of action,' analyst Edward Meir at MF Global said in a report.
Mining shares weighed on the London FTSE 100 index of leading shares with BHP Billiton, Rio Tinto and Anglo American down over 1.9 percent and found amongst the ten largest losers.
The pan-European FTSEurofirst 300 index was 0.08 percent stronger at 1,463.38, snapping a two-day losing streak.
The index has fallen 8 percent so far this month, placing it on track for its worst monthly fall since Dec. 2002.
The market still was dominated by economic concerns about a possible slowdown in the United States, Merrill's Hynes said.
'The credit crunch woes continue to weigh on people's minds but overall the outlook remains unchanged for us-it is very strong for industrial metals,' he added.
Investors are awaiting a series of US data including existing home sales in October and the Federal Reserve's 'Beige Book' report that provides an anecdotal summary of economic conditions nationwide.
By 1330 GMT US durable goods data is due and by 1500 GMT US existing home sales figures are released.
Later at 1900 GMT the Beige Book is out.
'These figures affect sentiment, but we actually see the US having very little incremental effect on the growth in metals consumption,' Hynes said.
Instead top consumer China and the greater Asia region will provide some 80 percent of growth in metals consumption in 2008, he said.
LME stocks rose again on Wednesday up 1,225 tonnes to 188,225, after falling by 400 tonnes on Tuesday interrupting the rising trend since early October which has seen stocks increase by 40 percent.
Aluminium eased $17 to $2,490/2,493.
'Aluminium looks to be under pressure, especially if we close below $2,500 today,' the LME trader said.
Tin was flat at $16,825/16,875, zinc fell to $2,355/2,365 from $2,380/2,390 and lead shed $50 at $2,650/2,970.