Commodity News
HeadLine : Copper drops after weak U.S. confidence data, doubts on China
Date : Nov 26 2014
Copper and other base metals dropped on Tuesday after a surprise fall in U.S. consumer confidence and as investors doubted whether additional monetary policy easing in top metals consumer China would translate into a significant increase in demand.

Three-month copper on the London Metal Exchange (LME) closed down 1 percent at $6,606 a tonne, undermined by data showing U.S. consumer confidence fell in November to its lowest level since June.

Copper touched a three-week high of $6,772.50 on Friday after China cut benchmark interest rates in a bid to jumpstart the economy.

On Tuesday, China's central bank lowered the yield for a key short-term money rate for the fourth time this year, but copper failed to gain traction amid concerns that the measures were unlikely to spur an immediate market recovery.

China consumes some 45 percent of the world's copper.

A lot of people are not convinced that this will make an awful lot of difference to Chinese economic growth, that it will feed through to greater lending to smaller companies for example.

The spot copper market in China also remained weak, with premiums for bonded stocks in Shanghai trading around $70 a tonne this week versus about $180 in January as domestic economic growth slows.

Metals failed to get much support from a decline in the dollar after the weak U.S. consumer confidence data.

A weaker dollar often gives a boost to metals priced in the U.S. currency, making them less expensive for holders of other currencies.

Benchmark aluminium closed up 0.2 percent at $2,049 a tonne, paring gains after the U.S. data. It earlier hit a session peak of $2,068, the highest since Nov. 13, after market signals of shortages of near-term material.

The premium of cash aluminium over three-month futures CMAL0-3, or backwardation, climbed to $28.50 a tonne by Tuesday's close, the highest since December 2012. A backwardation usually indicates a lack of available spot metal.

Nickel ended down 0.8 percent at $16,525 a tonne, giving back gains struck on Monday when it hit its highest in more than six weeks.

Zinc finished down 1 percent at $2,271 a tonne, lead lost 0.4 percent to close at $2,052 and tin ended 1.1 percent weaker at $20,200.
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