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METALS-Copper slips as China data and dollar spark profit-taking

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* LME/ShFE arb: (Updates with official prices)

By Peter Hobson

LONDON, Aug 3 (Reuters) - Copper edged lower on Thursday and nickel was set for its first fall in 10 sessions as a slightly stronger dollar and a slowdown in Chinese services sector growth triggered profit-taking.

But copper, which hit a two-year high on Monday, remained well supported by strong Chinese manufacturing data earlier this week and tight supplies, said ETF Securities analyst Nitesh Shah.

"There's a minor pullback from the past few weeks (but) the fundamentals remain quite strong. We've seen no real weakness in economic data."

COPPER: Benchmark copper on the London Metal Exchange traded down 0.5 percent at $6,318 a tonne in official rings, still close to Monday's two-year high of $6,430 and up 14 percent since early June.

CHINA: Growth in China's services sector slowed in July, a survey showed on Thursday, but data earlier showed manufacturing grew strongly. CHINA SCRAP: Proposed Chinese restrictions on scrap imports may have a limited impact on the refined copper market, Barclays analysts said: "Net consumption and scrap production rates are likely to remain the same, with only the supply chain and country of refining changing." GRASBERG: An international trade union will press Indonesia to reinstate thousands of striking workers at Grasberg, the world's second-largest copper mine. COPPER STOCKS: Prices were supported by a fall in on-warrant stocks at LME-registered warehouses to 189,900 tonnes from more than 230,000 in mid-July after 8,700 tonnes of cancellations. NICKEL: LME nickel did not trade but was bid down 0.6 percent at $10,290 a tonne, on track for its first decline since July 20 after touching a four-month high of $10,445 earlier in the session.

FUNDAMENTALS: Expectations of stronger demand from Chinese stainless steel mills and concerns over supplies from top nickel ore exporter the Philippines have boosted the metal.

SUPPLY: But ore exports from Indonesia are increasing, with licences for exports totalling 8.1 million tonnes granted since a ban was relaxed in January, analysts at Commerzbank said.

DOLLAR: The U.S. dollar rose but remained near 15-month lows. Dollar weakness has fuelled demand for dollar-denominated metals because it makes them cheaper for holders of other currencies. FRX/

SPECULATORS: "Much of the recent strength across industrial metals has been financially driven (whether dollar related/money inflows)," brokers Marex Spectron said in a note, warning that physical metal demand may not justify gains and increased financial interest could cause price volatility.

PRICES: Aluminium traded down 0.6 percent at $1,915, zinc did not trade but was bid 0.4 percent higher at $2,813 and lead was bid up 0.4 percent at $2,363. Tin traded up 0.1 percent at $20,605 a tonne.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Top base and precious metals analysis - GFMS LME/ShFE arb ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by James Regan; Editing by David Clarke and Mark Potter)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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