Copper eased on Friday as Middle East tensions weighed but a G7 joint intervention to calm market nerves over the Japanese earthquake disaster limited losses and helped boost risk appetite.
|||Copper eased on Friday as Middle East tensions weighed but a G7 joint intervention to calm market nerves over the Japanese earthquake disaster limited losses and helped boost risk appetite.
Three-month copper on the London Metal Exchange traded at $9,500 a tonne by 12:00 SA time from Thursday's close of $9,565 a tonne. Other base metals rose.
“There is a rebound in risk appetite but it's being limited by what is going on in the Middle East,” Danske Bank analyst Christin Tuxen said.
“Overall we are seeing a rebound in risk appetite and in demand for commodities ... The idea that a weaker yen would be able to improve Japanese companies' competitiveness is spurring market optimism that the Japanese industry will be coming back on track sooner ... This is quite positive for base metals.”
The Group of Seven agreed on joint intervention to curb the soaring yen and calm markets jittery over Japan's nuclear power plant crisis. Japan is still racing to keep the overheating fuel rods at a quake-damaged nuclear power plant under control and avert a nuclear catastrophe.
Base metals have largely outperformed the commodities complex and equities in the week following the devastating Japan earthquake and tsunami, as Japan's reconstruction effort is expected to boost metals demand in the medium- to long-term.
Investors are also watching the escalating tensions in the Middle East and North Africa. The United Nations authorised military attacks on Muammar Gaddafi's forces, but his forces closed in on the Libyan rebels and he vowed to storm their stronghold with “no mercy, no pity.”
“The Middle East tensions are very much looming in the background,” Tuxen said.
Brent crude rose $2 after the U.N approved military action in Libya. The euro rose to a four-month high against the dollar after the intervention in euro/yen.
COPPER STOCKS RISE AGAIN
In Asia, traders cited renewed Chinese buying. Investors have lamented a dearth of buying by China, as the the world's top copper consumer has dashed market hopes by not returning to the market as expected after its New Year holiday in February.
Stocks of copper in LME warehouses last rose 850 tonnes to 429,650 tonnes, data showed.
“We think that the demand environment remains favorable but uncertainty currently dominates sentiment,” Credit Suisse said in a note.
Aluminium traded at $2,537 from $2,523 a tonne. LME stocks of the metal used in transport and packaging last fell 6,575 tonnes to 4,612,825 tonnes, but a record-high 4,640,750 tonnes hit in January 2010 remains within reach.
Lead traded at $2,703 from $2,651 a tonne.
Shanghai Futures Exchange said it had received regulatory approval to officially start trading lead futures from March 24, bringing a new hedging instrument for smelters to manage price risks.
Tin traded at $29,500 from $29,375 a tonne while zinc was at $2,341.50 from $2,333 a tonne.
Nickel traded at $26,300 from $25,925 a tonne.
Somali pirates hijacked a nickel cargo ship owned by shipping firm PT Samudera Indonesia , a director of the firm said on Friday. - Reuters
Source: http://www.iol.co.za/copper-eases-g7-limits-losses-1.1043954
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