https://globalmacroresearch.com/wp-content/uploads/2016/06/50-Park-Capital-white-background-LOGO.jpg 0 0 email@example.com https://globalmacroresearch.com/wp-content/uploads/2016/06/50-Park-Capital-white-background-LOGO.jpg firstname.lastname@example.org 16:52:062012-03-01 16:52:34Adam Sarhan Reuters Quote: Copper 2.29.12
METALS-Copper slips from 2-wk high after Bernanke speaks
Wed Feb 29, 2012 2:22pm EST
* Bearish Fed comments erode early copper rally * Copper prices post 2nd straight monthly gain * U.S. 4th quarter economic growth revised up * Coming up: Chinese manufacturing PMI Thursday By Chris Kelly and Harpreet Bhal NEW YORK/LONDON, Feb 29 (Reuters) - Copper fell for the first time in four days on Wednesday and pulled back from a two-week high after a tempered view of the U.S. economy from Federal Reserve Chairman Ben Bernanke led a wave of risk reduction across broader markets. Copper fell alongside other risk asset markets like gold, crude oil and the euro after Bernanke said the U.S. economy would have to strengthen to ensure that the unacceptably high jobless rate keeps dropping. "The job market is far from normal," Bernanke said. "Continued improvement ... is likely to require stronger growth in final demand and production." But he stopped short of signaling further Fed bond purchases, dashing the hopes of some traders in financial markets who were betting on more monetary stimulus. "The underlying fundamental data has not really shifted, but Bernanke is making it clear that any more additional stimulus from him is off the table at this juncture," said Adam Sarhan, chief executive of Sarhan Capital. "The global demand story for copper now comes more into play. If you have easy monetary policy, that bodes well for the economic recovery and stronger demand by extension. If central banks around the world are going to stop this easy money period, there goes demand." London Metal Exchange (LME) three-month copper shed $101 to end at $8,499 a tonne, after touching a session peak at $8,695.25 -- its highest since Feb. 10. In New York, the active May COMEX contract settled with a loss of 4.20 cents at $3.8795 per lb, after dealing between $3.8050 and $3.9615. Copper prices rose earlier in the day on news that the European Central Bank (ECB) had allocated more than $500 billion for low-interest loans, fueling hopes that more credit will flow to businesses and that government borrowing costs will ease further. "The LTRO kicked off the rally back in December, but interestingly enough, today happens to be the second LTRO ... where everything across the board has come back down to life," Sarhan said. Further early support stemmed from U.S. data showing the world's largest economy grew a bit faster than initially thought on slightly firmer consumer and business spending, calming fears of a sharp slowdown in growth in early 2012. "The U.S. data has clearly been better in recent weeks, there's underlying strength in the U.S. economy. But Europe remains a mess and oil prices are a concern," said Nic Brown, head of commodities research at Natixis. "We're optimistic on base metals, and copper in particular, but we suspect at the minute the price resilience has been expectation rather than reality." CHINA DEMAND WORRIES Copper still posted a second month of gains in February after hitting a five-month high of $8,765 earlier in the month. But analysts say demand from top consumer China, which uses around 40 percent of the world's copper, needs to bounce back to justify the metal moving higher. Soft physical premiums for copper in Shanghai reflect continued weakness in Chinese demand, with a Shanghai-based trader saying premiums for cash copper have slipped to between $40 and $70 per tonne over London prices from around $80 to $90 earlier this month. Copper stocks in warehouses monitored by the LME fell by a further 2,425 tonnes to 296,425 tonnes, a fresh 2-1/2 year low. The ratio of cancelled warrants, material earmarked for delivery, to total stock stood at 31.69 percent, mostly in U.S. locations. In contrast, stockpiles of copper at warehouses monitored by the Shanghai Futures Exchange remained near 10-year highs despite a drop last week for the first time since early December. Supporting copper, Chilean industrial production fell 10.5 percent in January from December and 1.2 percent from a year earlier, hurt by a drop in output in the mining sector. In Indonesia, a stoppage at Freeport McMoRan Copper & Gold Inc.'s Grasberg mine could be resolved within days, with talks between workers and management progressing well, a union official said on Wednesday. Metal Prices at 1843 GMT Metal Last Change Pct Move End 2011 Ytd Pct move COMEX Cu 387.70 -4.20 -1.07 343.60 12.83 LME Alum 2327.00 2.00 +0.09 2020.00 15.20 LME Cu 8499.00 -101.00 -1.17 7600.00 11.83 LME Lead 2160.00 -95.00 -4.21 2035.00 6.14 LME Nickel 19250.00 -505.00 -2.56 18710.00 2.89 LME Tin 23600.00 -455.00 -1.89 19200.00 22.92 LME Zinc 2112.00 -11.00 -0.52 1845.00 14.47 SHFE Alu 16250.00 -20.00 -0.12 15845.00 2.56 SHFE Cu* 61070.00 10.00 +0.02 55360.00 10.31 SHFE Zin 16140.00 15.00 +0.09 14795.00 9.09 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
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