Shanghai copper up

Shanghai copper rose on Tuesday after hitting its lowest level so far this year in the previous session, buoyed by hopes that policymakers from the Group of Seven leading industrialised nations will take action to ease the euro zone debt crisis.
The last-minute talks underlined the heightened global alarm about strains in the euro zone, which is darkening the outlook for the global economy and industrial metal demand. The euro and equities clawed back from heavy losses as many investors paused selling riskier assets ahead of an emergency conference call among G7 finance chiefs. The most-active September copper contract on the Shanghai Futures Exchange closed 1.4 percent higher at 53,490 yuan ($8,400) a tonne, after hitting a 2012 low of 52,330 yuan on Monday.
The COMEX benchmark July contract moved up 0.6 percent to $3.328 per lb ($7,337 a tonne) by 0715 GMT. London copper was not traded as the London Metal Exchange is closed for a public holiday on Tuesday. "Chinese investors are mainly looking to the euro zone for trading direction today as nothing much has changed in domestic demand, which has been lacklustre for some time," said Orient Futures derivatives director Andy Du. "Unless more bad news comes out of the meetings on the euro zone, we should see support for Shanghai copper at 52,000 yuan for a while, with the upside capped by strong resistance at 55,000-56,000 yuan."
Many investors hope the G7 leaders will give some indication that euro zone countries are moving towards more fiscal integration, particularly in the form of a region-wide deposit guarantee scheme. "Many investors believe that given how bad the global economy seems to be, new quantitative easing and stimulus measures are increasingly in the cards in the US, euro zone and China," said a Shanghai-based trader.
China had announced a slew of measures to boost economic growth, including fast-tracking infrastructure projects and subsidising purchases of vehicles and household appliances in some regions. Traders said they expect the measures to revive copper demand, which remains sluggish in the second quarter, the traditional peak demand season for the metal.
"The order books of copper's downstream industries will stay weak until at least two months later when the effects of Beijing's spending programmes start to trickle in," said Yang Changhua, an analyst with state-backed research firm Antaike. "There are no signs of widespread restocking yet as investors are scared off by the state of the global economy."