Monday, 07 January 2013 10:19
MELBOURNE: London copper prices steadied on Monday, supported by signs the world's top two economies are inching into recovery, although worries the US Fed could halt asset purchases as soon as this year kept a lid on prices.
Metals prices have found support from global manufacturing indexes that showed China's economy has regained momentum while the US economy is slowly mending, with more data out this week.
China's official manufacturing purchasing managers' index held steady in December at 50.6, matching November's seven-month high. China's trade and producer price data is due later in the week.
China is the world's top consumer of industrial metals, accounting for around 40 percent of refined copper demand.
"The market is looking at China data at the end of the week for confirmation of the recovery in Chinese activity," said Nick Trevethan, senior commodity strategist at ANZ in Singapore.
Three-month copper on the London Metal Exchange had edged up 0.16 percent to $8,098 a tonne by 0311 GMT, reversing losses of almost 1 percent in the previous session.
Copper prices hit their highest in more than two months last week after US lawmakers struck a "fiscal cliff" deal, narrowly averting devastating tax increases and spending cuts. But minutes from the latest Fed meeting that signalled it may rein in easing measures sooner than expected soured general investor sentiment.
After closing 2012 with gains of 4.3 percent, copper prices rallied to $8,256.50 a tonne on Jan. 3, the highest since Oct. 18. Copper prices are up 2.1 percent year-to-date.
The Federal Reserve could halt its asset purchases this year, two top Fed officials suggested on Friday, a view also gaining traction among economists at Wall Street's top financial institutions.
The most-traded April copper contract on the Shanghai Futures Exchange was little changed at 58,400 yuan ($9,400) a tonne, up 0.07 percent.
US employers kept their pace of hiring steady in December, although slightly falling short of the levels needed to bring down a still lofty unemployment rate.
"Positive sentiment from The Fiscal Cliff deal, as well as Friday's Employment Report, is likely to carry into this week," said Texas-based consultancy Prestige Economics in a report.
Asian shares outside Japan edged up on Monday, supported by data showing the US economy continuing on a path of slow but steady recovery that had pushed Wall Street stocks to a five-year high on Friday.
Center>Copyright Reuters, 2013