Copper steadies

Copper steadied on Thursday after comments by the European Central Bank indicating readiness to use additional measures to shore up the economy offset worries about economic growth in top metals consumer China and a weak euro. European equities rallied after ECB President Mario Draghi said its members all stood ready to take more policy action if needed to revive a struggling euro zone economy and that the bank's staff would prepare the groundwork.
Three-month copper on the London Metal Exchange closed up 0.3 percent at $6,660 a tonne. On Wednesday, it touched its lowest level since October 20 at $6,543.50 a tonne in intraday trade before recovering to close at $6,640. "Draghi did reiterate what he said before, namely that the ECB will aim to increase the size of its balance sheet towards 2012 dimensions, meaning that at least another $1-$1.5 trillion of buying needs to be conducted if this level is to be achieved," said Ed Meir, an analyst at INTL FCStone.
Ultra-loose monetary policy adopted by central banks around the world in the past few years has drawn investors to commodities as an alternative to interest-bearing assets. Putting pressure on the outlook for metals, however, China's central bank warned that the world's second-biggest economy is expected to face stronger headwinds in the coming months, and forthcoming data is likely to show a persistent cool-down, according to Reuters polls.
The euro fell to a two-year low against the dollar, weighing on metals by making commodities priced in the US unit more expensive for holders of other currencies. In US economic news, the number of Americans filing new claims for unemployment benefits fell more than expected last week, in the latest sign of tightening labour market conditions. In other metals, aluminium rose 0.8 percent to end at $2,076 a tonne. Xizhi Yao, senior aluminium analyst at state-backed Chinese research firm Antaike, said demand was a concern due to the weakness in China's property sector.
"Aluminium consumption has not been affected by the slowdown at present, but the effect from the slowdown in the real estate industry will become significant next year," he told the Reuters Global Base Metals Forum. "It is likely that Chinese aluminium prices will decline in H1 2015."
Tin closed 1.7 percent higher at $19,970 a tonne, possibly due to tighter Indonesian export regulations that came into force at the start of the month, said Stephen Briggs, metals strategist at BNP Paribas. "From the start of this month, they've tightened the regulations even further, so for example you've got to get separate licences if you want to export solder."
Tin industry group ITRI told Reuters in August the new rules could spark a price rally near the year end. Under the new rules, it is more difficult to export products other than 99.9 percent pure tin ingots, and 20 to 40 percent of sales had been in other forms, Peter Kettle, markets manager at ITRI, said at the time. Indonesian tin exports jumped 36 percent in October from the previous month, an official from the trade ministry told Reuters on Thursday.
That surge in exports was probably at least partially behind the recent weakness in prices, Briggs said. Tin fell 3.1 percent last month and 7.2 percent in September. Nickel closed 1.2 percent higher at $15,500, lead was up 0.8 percent at $2,010 and zinc rose 0.3 percent to $2,227 a tonne.