Thursday, 12 March 2015 02:10
LONDON: Copper hit a two-week low on Wednesday as the dollar touched multi-year highs and data from top consumer China disappointed, though losses were capped by a spate of recent mine outages.
Data out overnight showed growth in China’s investment, retail sales and factory output all missed forecasts in January and February and fell to multi-year lows.
Also dampening metals was the euro’s dive to a 12-year low against the dollar after the European Central Bank began its 1 trillion euro bond-buying programme this week.
Three-month copper on the London Metal Exchange ended down 0.6 percent at $ 5,730 a tonne, having earlier touched a two-week low of $ 5,712.
Copper has staged a modest recovery from January’s 5-1/2 year lows of $ 5,339.50 as investors cover short positions ahead of China’s seasonally strong second quarter.
“That period has seen a certain amount of short-covering but by no means all of it,” said Guy Wolf, global head of market analytics at broker Marex Spectron. “Our view would be that dips in copper should continue to be bought.”
He said Marex’s Global Copper Sentiment Index remains depressed at minus 62.5 points, even though it has recovered from a low of minus 95.7 in late January and gained over 10 points in the latest week.
Also underpinning copper, recent cuts in copper mine output are raising doubts about the extent of a widely expected global surplus that has driven down prices.
“It (copper) has definitely got a lot of momentum behind it due to these supply issues,” said strategist Daniel Hynes of ANZ in Sydney.
Copper miner Antofagasta said on Wednesday it had reached a deal with protesters who had been blocking access to its Los Pelambres mine in Chile, affecting output.
Tin shed 2.1 percent to $ 17,430 a tonne, while aluminium fell 0.8 percent to $ 1,748 a tonne, its weakest level in nearly a year.
Nickel ended down 2 percent at $ 13,775 a tonne, zinc fell 1.3 percent to $ 1,995 and lead dropped 0.2 percent to $ 1,808.
Copyright Reuters, 2015
