Copper down, aluminium stocks rise

Copper and other base metals fell on Monday after weak Chinese trade data and a warning about the European economy. Three-month copper on the London Metal Exchange shed 0.7 percent to end at $6,405 a tonne. China's imports shrank unexpectedly in November, while export growth slowed, fuelling concerns that the world's second-largest economy could be facing a sharper slowdown. "The market seems to be trading on macro signals," Citi analyst David Wilson said. "But I think people are too pessimistic on China."
A deluge of Chinese data over the coming week is likely to show a persistent cooling in the economy. Limiting losses, however, China's copper imports in November rose 5 percent from October to hit a seven-month high. "People keep trying to talk copper down, but it's still holding up relatively well ... we've probably seen the lows," Wilson added.
On Friday copper hit a one-week high of $6,526 a tonne, rebounding from its lowest in four and a half years on December 1 at $6,230.75. Sentiment was also undermined by comments from a European Central Bank policymaker that the euro zone economy was experiencing a "massive weakening". "The risk is that we see further liquidation of positions, considering no one is confident of the (global economic) outlook, particularly in early 2015," ANZ analyst Daniel Hynes said.
Data showed hedge funds and money managers raised net short positions in copper futures and options in the week to December 2. Pressure on aluminium spot supply eased after 4,100 tonnes moved into LME warehouses. The cost of rolling a short position for aluminium cash for tomorrow/next day delivery traded on Friday at $9.50 a tonne, after holding above $7 for more than a week, ramping up pressure on those holding short positions.
One investor had scooped up the majority of available cash metal, roiling prices and stoking supply concerns amid a revival in demand from the automotive and construction sectors. But on Monday, the costs for tomorrow/next delivery collapsed, relieving the pressure on shorts. Three-month aluminium fell 0.86 percent to end at $1,965 a tonne, while zinc lost 0.89 percent to end at $2,217. Nickel dropped 0.74 percent to close at $16,700, and tin rose 1.26 percent to end at $20,455 a tonne. Lead closed down 0.15 percent at $2,035 a tonne.