Copper steadied on Thursday following a 3 percent loss the day before, helped by consumer buying and improved appetite for risk, but any gains were limited by a stronger dollar and ahead of the long Easter weekennd in US and European markets Three-month copper on the London Metal Exchange closed at $8,361 a tonne against a close of $8,350 a tonne on Wednesday.
A government report showed the number of Americans lining up for new jobless benefits fell to the lowest in nearly four years last week. This boosted the dollar, as the euro fell, offsetting gains base metals would have made due to the jobless figures. A stronger dollar makes US priced commodities like copper and aluminium more expensive for holders of other currencies.
Copper this week rallied to within 1 percent of 2012 peaks above $8,700 a tonne on anticipation of more monetary easing in the United States. But minutes from a US monetary policy meeting on Tuesday quashed those expectations and led to a divestment of risk across markets.
Prices have been caught in a range since late January, when they reached $8,200 a tonne on consumer buying and were capped by producer selling at around $8,600, Citi analyst David Wilson said. "Each time copper dips we see consumer hedging and some buying from investors. But as prices get to about $8,600, you're getting some of the small producers selling. Funds have no conviction either way, so it seems to be stuck in this range for now," he said.
Market attention will now turn to US non-farm payrolls on Friday, and trade data from top copper consumer China, which will shed light on consumption in a country that accounts for 40 percent of world copper demand. Both figures are due before London reopens on Tuesday after the 4-day Easter holiday weekend. "With our house view for US employment data to come in above consensus, we could see room for potential upside in copper prices in the coming days," ANZ said in a research note.
Chinese trade data early on Tuesday is expected to show consistently high copper imports as metal is used as collateral to secure cheaper financing in the credit-strapped country. China's arrivals of refined copper are expected to have risen in March after February's higher-than-expected figure as importers scheduled more term shipments under 2012 contracts on expectations of peak domestic demand, traders said last month.
"You're probably going to find the import number is reasonable, given the Chinese are buying for financing reasons. It's just got nothing to do with consumption," Citi's Wilson added. Lead closed at $2,059.5 from $2,012.50, and aluminium at $2,109 from $2,093, earlier hitting a new low since January 9. at $2,085 a tonne. Nickel closed at $18,405 from $17,855.
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