Copper edges up

Copper rose on Friday on hopes that China would unleash more stimulus measures after factory output growth slowed more than expected in the world' top metals consumer. Zinc pared losses on buying interest by investors expecting shortages to develop next year. China's economy showed further signs of fatigue in November, with factory growth slowing more than expected and investment expansion near a 13-year low, putting pressure on policymakers to unveil stronger support measures.
"I wouldn't say anybody's going to be shocked by it, but it does highlight the weakness," said analyst Vivienne Lloyd at Macquarie in London. Three month copper on the London Metal Exchange ended up 0.46 percent at $6,490 a tonne. Prices have shed more than 11 percent this year on expectations of mounting supply, making copper the worst performer among LME metals.
LME zinc fell 0.18 percent to end at $2,191 a tonne, paring earlier losses of nearly 1 percent. It also bounced in the previous session, falling at one point to a near six-month low of $2,153.50 a tonne before closing higher. "With it having been humbled in the last month or two, it does provide more of an entry point for people who want to get in and get long," Lloyd said. "Our expectation is for prices to rise next year, we do see it as a good story."
Zinc, expected to move into a deficit next year as major mines close, has shed about 9 percent over the past three months. The sharp fall in Brent crude oil prices, which dropped to a 5-1/2-year low of $63 a barrel, could be negative for zinc prices in the short term. Zinc is among the most oil-intensive of metals to produce, with power accounting for around 20 percent of processing costs. Power makes up as much as 40 percent of aluminium costs, but most of that comes from coal.
"I suspect there may be some fears of some of China's excess zinc capacity being reinvigorated with this weaker oil market," said analyst Daniel Hynes of ANZ in Sydney, adding that ANZ still expects to see the market in deficit next year. Zinc premiums in Asia sank to two-year lows this week on Chinese selling of stocks, industry sources said. Aluminium ended down 0.54 percent at an eight-week low of $1,936 a tonne, tin dipped 0.25 percent to end at $20,350 while lead closed up 0.50 percent at $1,995. Nickel closed up 2.61 percent at $16,700 a tonne.