Copper and other base metals prices rose on Monday after the dollar fell and better-than-expected Chinese trade data eased fears of a slowdown in demand in the top commodities consumer. A surge in China's exports in September was an upbeat signal for the world's second-largest economy while a near 15 percent jump in copper imports cheered investors about metals demand.
"Certainly that trade number for imports of unwrought copper was probably above expectations and a pick-up from the previous month," said Stephen Briggs, metals strategist at BNP Paribas. The trade data, however, also contained some more worrying numbers for future copper prices, he said. "The extremely high imports of copper concentrate will translate into higher refined production of copper in China. That's a bit of a negative," Briggs said.
Imports of raw material copper ores and concentrate jumped 34.4 percent from the previous month in September, hitting a record 1.29 million tonnes, the data showed. Many analysts are expecting the copper market to go into surplus due to higher mine output this year. China's surprisingly strong trade performance in September may reduce the chances of aggressive policy action such as an interest rate cut, but the prospects of a prolonged property slump suggests more measures are still needed to shore up the economy, economists said.
"It's not an outrageously bullish print, but it might go some way to rebase sentiment towards global economic growth which had been getting very bearish ... I would read this as mostly positive," said Daniel Morgan, an analyst at UBS in Sydney. Three-month copper on the London Metal Exchange climbed 1.05 percent to end at $6,710 a tonne, after falling in the previous session. Prices were climbing away from five-month lows of $6,600 touched on October 2. A weaker dollar also supported metals prices, after a recent rally in the US currency had weighed on commodity prices.
There was less upbeat data on Monday from China's car sector, showing September auto sales rose 2.5 percent from a year earlier, the slowest pace in 19 months, dragged down by sluggish sales of commercial vehicles such as trucks. Speculators still had an overall negative view on copper last week, based on data from the Commodity Futures Trading Commission, which showed on Friday that hedge funds and money managers trimmed copper net shorts in the week up to October 7 by only 189 contracts to 21,249.
The world's biggest copper producer Codelco apparently had a neutral view on the market, having offered 2015 copper term premiums at $112 a tonne for customers in Europe, unchanged from this year, two sources with direct knowledge of the offer said on Monday. LME nickel ended up 0.64 percent at $16,455 a tonne. "Price rallies this week have been sold into by nickel scrap traders and CTAs and larger funds that have liquidated their strategic longs in recent weeks," said Triland in a note on Friday. CTAs, commodity trade advisers, are funds that tend to follow momentum strategies.
"Dips are being bought by consumers but only in small tonnages," the broker added. Aluminium closed up 0.78 percent at $1,945 a tonne, zinc ended up 0.95 percent at $2,336 a tonne, lead was last bid up 0.19 percent at $2,066 a tonne and tin ended down 0.25 percent at $20,150 a tonne.
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