Jan. 17 （Bloomberg） -- Copper in London fell, erasing gains made in early Asian trading, after China stepped up measures to cool its economy and the dollar strengthened. Nickel eased from the highest level since May.
Copper for three-month delivery on the London Metal Exchange declined as much as 0.4 percent to $9,613.25 a metric ton before trading at $9,621.75 at 1:36 p.m. Singapore time. It advanced as much as 0.4 percent in intraday trading.
China’s central bank on Jan. 14 ordered lenders to hold more deposits as reserves for the fourth time in two months, adding to last year’s policy tightening measures by the government that included two interest rate hikes. Property prices in the country rose for a 19th month in December.
“The longer-term outlook for demand and supply will ensure prices are supported,” said Sun Qi, an analyst at Central China Futures Co. from Henan. “In the near term, concerns about tightening in China will put a lid on rallies,”
April-delivery metal on the Shanghai Futures Exchange were little changed at 71,480 yuan （$10,864）, after gaining as much as 0.8 percent. Futures in New York dropped 0.3 percent to $4.3990 a pound, erasing a gain of as much as 1.2 percent.
A stronger dollar is also keeping prices in check, said Sun. The dollar climbed for the first day in six against a six- currency basket including the euro on concern that Europe’s debt crisis may linger, after Fitch Ratings joined Moody’s Investors Service and Standard & Poor’s in cutting Greece’s debt to junk.
China Demand
Growth of copper consumption in China, the top consumer, may almost halve this year as government measures to restrict monetary expansion cool demand, said Michael Jansen, metals strategist at JPMorgan Securities Ltd., at a Jan. 15 conference in Shanghai. Real consumption is likely to gain about 7 percent to 7.88 million tons, down from 13 percent in 2010, he said.
China’s copper demand growth may be at least 6 percent this year, slowing from 10 percent in 2010, Bonnie Liu, analyst at Macquarie Group Ltd., said at the same conference. Demand may reach 7.74 million tons, Liu said.
Nickel in London was little changed after gaining as much as 0.9 percent to $26,100 a ton, the highest price since May. Aluminum was little changed at $2,470, zinc fell 0.5 percent to $2,445 and lead lost 0.5 percent to $2,665.50.
“You still have upside,” Mohammad Ajib Anuar, group chief executive officer of Malaysia’s largest producer, said in an interview. A price of $35,000 to $40,000 in the next five years “is not impossible” as demand climbs, new mines take longer than expected to start output and ore quality drops, Anuar said.
Tin, 2010’s best performer on the LME, climbed for the first day in three, by as much as 0.4 percent to $26,950. The metal used in electronics and packaging, reached a record $27,500 on Nov. 9, and may reach $40,000 as global supply lags behind demand until at least 2013, according to Malaysia Smelting Corp.
--Editors: Ravil Shirodkar, Matthew Oakley.
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