Copper steadies

Copper steadied on Wednesday as the dollar fell, but gains were limited ahead of data from top metals consumer China and on concern about the winding down of US monetary stimulus measures. Three-month copper on the London Metal Exchange closed at $7,006 tonne from a last bid of $7,005 on Tuesday. The metal has been stuck between $6,600 and $7,100 since mid-June, with traders seeing little prospect of prices breaking out before seasonal demand in the fourth quarter.
Chinese trade data is due on Thursday and inflation, industrial output and retail sales on Friday. The world's No 2 economy has slowed in nine out of the past 10 quarters, stoking worries about its demand for commodities and dragging down copper prices by 12 percent so far this year.
"We still have a bearish view given the Chinese growth slowdown. Markets are looking towards the data tomorrow. Copper has remained quite resilient to poor US economic data, but if we see negative data out of China that could weigh on prices," analyst Tim Radford of Sydney-based adviser Rivkin said. Exports, factory output and retail sales may have all edged up in July, according to a Reuters poll, showing initial signs of stabilisation in the Chinese economy as the government takes steps to head off a sharper slowdown. Market players are also keeping an eye on the US Federal Reserve for indications of when the central bank will start winding down its stimulus programme, a major driver of investment in global commodities.
Signs that the Fed would trim its stimulus programme as early as next month sparked a stock market sell-off. The dollar also fell, helping to lift the copper price. A weaker dollar makes commodities priced in the currency cheaper for holders of other currencies.
Tin, the best performer among the main LME metals so far this year, has gained about 11 percent over the past two weeks. On Wednesday, it was last bid $21,270 a tonne from $21,250 at the close on Tuesday. The price has been driven up by a delay in shipments from Indonesia, the world's top exporter of the metal, due to an overhaul of government export rules. The tin market should remain robust in coming months even if confusion about export regulations is solved, because Indonesia has been running down domestic stocks over the past 18 months, analyst Stephen Briggs at BNP Paribas said. "There has to be a pay-back, so you're not likely to see exports as high in next 18 months as they have been in the last 18 months," he said. In the second half, China's oversupply of aluminium is likely to escalate as more new capacity comes onstream, smelter sources said. LME aluminium closed at $1,797 a tonne from a close of $1,788.50, lead closed at $2,106 from $2,110.50 and nickel at $13,975 from $13,730. Zinc closed at $1,848 a tonne from a last bid of $1,857 on Tuesday.