Australia Stay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.. Sat, 31 Jan 2015 08:32:49 +0000 SRA Framework 2.0 en-gb London copper climbs as dollar falters ahead of Fed imageMELBOURNE: London copper moved further away from 5-1/2-year lows on Wednesday, propped up by a weaker dollar after a drop in US capital goods orders sparked talk the Federal Reserve might push back its timeline for raising interest rates.

Copper prices have been walloped by persistent signs of weakening growth in top user China as well as sickly European demand and a surge in the dollar.

The Federal Reserve is expected to signal it remains on track to begin raising interest rates later this year, as the central bank shows confidence that low inflation and rising risks from abroad have yet to derail the US economic recovery.

Analyst Dominic Schnider at UBS Wealth Management in Hong Kong said the Fed was unlikely to delay an interest rate rise, which meant metals faced the risk of a dollar revival in the near term.

"The lower oil price is a boost to consumers, so there is no reason for them to come on the dovish side. They will stick to their view. You should see renewed strength of the dollar, which should help copper test the $5,000 level in three months," he said.

Three-month copper on the London Metal Exchange climbed by 1.2 percent to $5,484 a tonne at 0743 GMT, after a 2.8 percent loss on Tuesday, when the price sank towards a 5-1/2-year low of $5,339.50 a tonne hit on Monday.

The most traded April copper contract on the Shanghai Futures Exchange sagged 1.3 percent to 39,690 yuan ($6,355) a tonne.

Global mining company Anglo American said that a sharp drop in commodity prices will likely result in impairment charges for its 2014 financial year, as it posted annual production ahead of its guidance for its key commodities.

Polish copper producer KGHM, faced with a strike at its Chilean mine, Sierra Gorda, said it had contingency plans to maintain low-level production if the dispute was not resolved.

In other metals, LME zinc rallied 1.3 percent to $2,131.50 a tonne, partially clawing back losses from the session before, helped by a positive price differential for Chinese buyers.

Copyright Reuters, 2015

]]> (Imaduddin) Australia Wed, 28 Jan 2015 12:33:52 +0000
London copper sags as traders trim risk ahead of ECB meet imageMELBOURNE: London copper slipped on Thursday from one-week highs hit the session before, as traders took profits on long positions built up on expectations the European Central Bank will announce weighty bond-buying measures later in the day.

Weakness during Asian trading hours reflects some scepticism by regional traders on the impact of any ECB move, said strategist Daniel Hynes of ANZ in Sydney.

"Copper is certainly still heavily shorted so I think you'll continue to see these little rallies fail to last."

Three-month copper on the London Metal Exchange had slipped 0.7 percent to $5,727.50 a tonne by 0721 GMT, paring gains from the previous session when it broke above the $5,800 mark for the first time since Jan. 13.

The most-traded March copper contract on the Shanghai Futures Exchange was up 0.6 percent at 41,560 yuan ($6,676) a tonne, having trimmed earlier gains of as much as 2 percent.

China prices have been underpinned by prospects Beijing will also set down fresh measures to soothe cooling economic growth, although hopes were dented by comments from a central bank official.

The European Central Bank is poised to announce a plan on Thursday to buy government bonds, resorting to its last big policy tool for breathing life into the flagging euro zone economy and fending off deflation.

Chinese Premier Li Keqiang said on Wednesday that China's slowing economy reflected the broader, global situation and promised that he would forge ahead with major reforms to boost growth prospects.

The impact of investment by China's state grid has been overblown, said Goldman Sachs in a note. Instead, copper's fortunes are far more closely tied to the country's ailing property sector, which it says accounts for a greater share of China's overall copper demand at some 50 percent.

"We expect construction activity (particularly completions) to remain relatively weak over the next 12 months. As such, we continue to see the risks to our 12-month copper price forecast as heavily skewed to the downside."

Chinese investment funds whose short-selling has helped push the copper price down to its lowest level in more than five years say they will watch China's consumption of the metal after the Lunar New Year to decide whether to try to force it lower again.

Among other metals, LME lead dropped 1.6 percent to $1,883. Prices had climbed in recent days after Toronto-listed Invernia Inc said it would suspend operations at its Paroo Station Mine in Western Australia, the world's largest lead carbonate mine.

Copyright Reuters, 2015

]]> (Imaduddin) Australia Thu, 22 Jan 2015 13:12:08 +0000
London copper climbs off 5-1/2 year lows; China, ECB in focus;-china-ecb-in-focus.html;-china-ecb-in-focus.html imageMELBOURNE: London copper climbed on Monday as prices recovered from last week's 5-1/2 year lows after China's state grid boosted spending plans, but caution over China's economy and this week's European Central Bank meeting were expected to cap any upward momentum.

As part of a broader package of stimulus to help shore up its struggling economy, China's state power grid on Friday announced plans to boost investment by 24 percent this year to 420 billion yuan ($68 billion).

"There is very strong support for actual grid investment," said analyst Ivan Szpakowski of Citi in Shanghai, who expects the new spending to support copper prices. China's power sector accounts for some 20 percent of global copper demand.

"The problem you have in the short run on copper is the negative macro climate. Until you get bullish macro news out of Europe or China, it's hard to see the macro community getting bullish, which creates headwinds for prices."

Three-month copper on the London Metal Exchange was trading up 0.8 percent at $5,759.50 a tonne by 0719 GMT, having jumped by more than 1 percent at the open. Prices last week sagged to their lowest since July 2009 at $5,353.25 a tonne.

China is expected to report on Tuesday that economic growth slowed to 7.2 percent in the fourth quarter, the weakest since the global financial crisis, a Reuters poll showed, keeping pressure on policymakers to roll out more stimulus measures.

Meanwhile, the ECB could launch a government bond-buying programme with new money as soon as its Jan. 22 meeting, although Greek elections three days later are a complication.

"We are seeing profit-taking on longs from last week - bargain buyers, and also people are not confident to bid (copper) too high," said a trader in Singapore.

"I think we will stay in range until the ECB meeting, and that the package will fail to improve risk momentum."

The most-traded March copper contract on the Shanghai Futures Exchange was up 1.7 percent at 41,770 yuan ($6,720) a tonne.

Chinese hedge funds, once again linked to a powerful sell-off in copper last week, were probably replaying an aggressive short-selling strategy they have also used to target iron ore and coal, according to industry sources.

"Oil prices fell so much and everyone was selling risk assets. Base metals hadn't fallen as much, so they have become a target (by the funds)," added Szpakowski.

The speculative community in China has been more bearish than the West for months, partly because of new refined capacity that came online in the second half, he said.

"A lot of them were also pretty negative on Chinese demand due to access to credit and a bearish real estate market - there's not just one niche reason."

Copyright Reuters, 2015

]]> (Imaduddin) Australia Mon, 19 Jan 2015 13:00:59 +0000
London copper eyes biggest weekly loss in more than three years imageMELBOURNE: London copper edged up on Friday after Beijing boosted lending measures but it was set to notch up its biggest weekly loss since 2011, hammered by bearish sentiment on global growth, with traders looking to sell into any rallies.

Copper found near-term support from news China's central bank will increase its relending quota by 50 billion yuan ($8.1 billion) this year, stepping up efforts to give targeted support to parts of the economy it sees as lagging.

However, echoing comments made by the World Bank at the start of the week, a sharp drop in oil prices and a stronger US economy probably won't be enough to brighten the outlook for global growth this year, the head of the International Monetary Fund warned on Thursday.

Given copper's technical break and surrounding bearish macroeconomic themes, "I definitely think this has further to go," said analyst Tim Radford of Sydney-based adviser Rivkin.

Three-month copper on the London Metal Exchange pared early gains to trade up 0.3 percent at $5,645 a tonne by 0709 GMT, after ending 1.7 percent higher in the previous session.

It slid 5.3 percent on Wednesday as prices plumbed the lowest since July 2009 at $5,353.25 a tonne and has fallen 11 percent so far this year.

The most traded March copper contract on the Shanghai Futures Exchange climbed 1.3 percent to 41,040 yuan ($6,612) a tonne.

Also supporting prices, China's top economic planner said there was no crisis in China's property market but the authorities needed to pay attention to continuing price adjustments in the sector.

"The bottom line is: should copper fall further? Not on the basis of fundamentals ... But that doesn't mean that it won't, nor that it should rally in the immediate term either," said an executive at an LME ring dealing firm.

The CME Group, parent company of the Chicago Board of Trade, has raised initial margins for copper contracts by 17.2 percent, effective Friday.

Premiums for copper in bonded zones in Shanghai were flat at $85, suggesting little appetite by physical players to stock up. However, zinc and nickel premiums rose by $10 to $120 and $75 respectively, suggesting consumer buyers were being tempted in.

In other metals, aluminium stocks held at three major Japanese ports rose for a ninth straight month to hit a record high at the end of December as imports rose and demand at home and elsewhere in Asia weakened.

The trend reflects the impact of swelling China exports, which has boosted supplies in the region, giving consumers more breathing room, a key reason for the delay in Japanese quarterly premium talks which are yet to be finalised for the first quarter.

Copyright Reuters, 2015

]]> (Imaduddin) Australia Fri, 16 Jan 2015 13:10:25 +0000
London copper climbs after slide, gains to be capped imageMELBOURNE: London copper climbed on Thursday on a mix of bargain-hunting and short covering, a day after its biggest slide in more than three years, but traders said selling would cap rallies even as large-scale buyers were lying in wait at lower levels.

Copper took a bruising after a bearish World Bank report on global growth, which would have been even darker had it not been for a 60 percent drop in oil prices, although that in turn is also eroding the price of commodities, said analyst Mark Keenan of Societe Generale in Singapore.

"Yesterday's move was very big - it was compounded by speculative selling, by Chinese selling, by option activity," he said. "We are still bearish copper."

Three-month copper on the London Metal Exchange climbed by 1.5 percent to $5,628.50 a tonne by 0738 GMT, after careening down 5.3 percent on Wednesday. The price tumbled more than 8 percent at one point to $5,353.25 a tonne, which was the weakest since January 2009.

Traders saw sellers emerging above $5,650, with buyers lurking around $5,500-5,450.

Three-month volumes picked up to around 9,000 lots after an unusually quiet start to the session following such a big slide, suggesting much of the physical market was sidelined, waiting for the dust to clear.

The most traded March copper contract on the Shanghai Futures Exchange cut losses to 2.9 percent at 40,920 yuan ($6,612) a tonne, off overnight lows near 5 percent.

Reflecting tepid physical demand, in Shanghai, bonded premiums climbed just $5 on Wednesday.

Supporting the market, investors bet on an increased chance of policy stimulus after disappointing China bank loan data.

Chinese banks extended far less credit in December than expected despite a surprise interest rate cut by the central bank.

But adding to bearish sentiment, Japan's core machinery orders rose less than expected in November, as renewed global growth concerns appeared to temper corporate spending plans and cast fresh doubts over how quickly the economy can recover from recession.

In other metals, LME nickel and LME zinc recovered around 1.5 percent, paring the previous day's losses, in the first trading session since index-related rebalancing ended, which analysts had expected to exert selling pressure on the metals. LME lead and aluminium also climbed 1 percent.

Copyright Reuters, 2015

]]> (Imaduddin) Australia Thu, 15 Jan 2015 13:19:31 +0000
Copper rout echoes oil; traders brace for more selling;-traders-brace-for-more-selling.html;-traders-brace-for-more-selling.html imageMELBOURNE: Copper prices extended their plunge on Wednesday to trade at the lowest in more than half a decade, as a rout that has punished other commodities such as oil took a firmer grip on the metal and traders braced for more losses.

Prices of copper - often seen as a bellwether for global economic health because of its use in industries ranging from construction to consumer goods - spiralled as much as 8 percent lower at one point, and were on track for the biggest one-day slide in more than three years, after a downgrade to global growth forecasts roiled markets.

The World Bank on Tuesday cut its growth forecast for 2015 and next year due to disappointing prospects in the euro zone, Japan and some major emerging economies. "Europe has been pretty sluggish, China's still got that property overhang, Japan's entered recession.

You've got the US and UK going fine, so it's a patchy global growth picture - but it's one that has definitely deteriorated from six months ago," said UBS analyst Daniel Morgan in Sydney.

"We are definitely not in global financial crisis territory, where global trade is impaired and can't be financed. We're still seeing commodity transactions - just at lower prices."

Benchmark London Metal Exchange copper was down 6 percent at $5,504 a tonne, having earlier hit its weakest since July 2009. Shanghai Futures Exchange copper slumped by its daily trading limit of 5 percent.

The exit of major banks from commodities in the past few years has also drained liquidity from the market, making downdrafts even more vicious, UBS analyst Morgan said. Oil tumbled to near six-year lows this week, while spot iron ore sagged towards the lowest in more than five years, swamped by oversupply.

Still, analysts say, it's not the same picture for copper. Analysts have been hastily paring back forecasts for a global copper surplus this year - the first in five years - after a string of production forecast downgrades.

Furthermore, prices are now sinking towards the $5,000 mark, where a quarter of global producers would be bleeding cash, according to consultancy CRU, threatening "tangible" cutbacks. The potential for shortages could encourage stockpiling by the likes of China's strategic buying unit. Chinese import data this week suggested bargain hunters made the most of falling prices.


Near term, however, prices risk further falls on bearish sentiment with physical demand for copper likely to be weak due to soft Chinese demand before the Lunar New Year, further technical selling and the threat of an options-related downdraft, traders said.

A physical trader in Singapore said there had been no calls from consumers to buy as yet, unlike in 2009 when prices also slumped. Prices cracking $6,000 and then $5,634, the 61.8 Fibonacci retracement of copper's post financial crisis bounce, triggered heavy sales by traders following chart-based strategies.

Traders had been nervously eyeing two big put option trades at $6,000 and $5,500 per tonne, which they feared could accelerate the rout. "Some people are going to have had an amazing start or have ruined their year on this move," a trader at a bank in Singapore said.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui) Australia Wed, 14 Jan 2015 13:41:32 +0000
Copper suffers meltdown on growth anxiety, euro on defensive imageSYDNEY: Unease over the global economy engulfed commodities and dented Asian equities on Wednesday, while the euro loitered near nine-year lows as investors bet the European Central Bank was just a week away from launching a new stimulus campaign.

As if the plunge in oil prices is not enough of a worry for global policymakers, copper futures dived 6.2 percent to $5,499 a tonne when major chart support cracked and triggered a host of stop-loss sales.

The metal is often considered a barometer of industrial demand, so the slump leant extra gravitas to news the World Bank had cut its 2015 growth forecasts blaming sluggishness in the euro zone, Japan and some major emerging economies.

"The global economy is at a disconcerting juncture," World Bank chief economist Kaushik Basu told reporters. "It is as challenging a moment as it gets for economic forecasting."

That was a challenging background for equities and MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3 percent.

Australia's main index fell 0.9 percent, with mining shares taking an added blow from the drop in copper.

Seeking to support growth, Japanese Prime Minister Shinzo Abe's cabinet approved a record $812 billion budget while cutting new borrowing for a third straight year.

The share market seemed underwhelmed, however, and the Nikkei lost 1.2 percent.

Falls in materials and energy shares had seen Wall Street end Tuesday with minor losses, and the omens were not bright for Wednesday with S&P EMINI futures down 0.3 percent.

The Dow eased 0.15 percent, while the S&P 500 dipped 0.26 percent and the Nasdaq 0.07 percent.

The dollar outpaced the euro on the back of upbeat US economic data and after two European Central Bank (ECB) officials fuelled expectations that the bank would launch a program at its Jan. 22 policy meeting to buy government bonds.

The single currency was stuck at $1.1780 after reaching a low not seen since December 2005 at $1.1753. Against the yen, the euro slumped to its lowest in over two months around 138.17.

Market attention now turns to the European Court of Justice (ECJ), which is expected to provide a non-binding opinion on the legality of an ECB bond-buying program later on Wednesday.


The pressure for policy action has grown intense as falling oil prices pulled consumer prices into negative territory across the euro zone last month.

So far this week, Brent has lost 7 percent and US crude 5 percent. On Wednesday, Brent gave up early gains and fell another 40 cents to $46.19 per barrel, while US crude shed 46 cents to $45.43.

The impact was clear in the UK where inflation halved to just 0.5 percent in December, the lowest in over 14 years. That only reinforced market expectations the Bank of England would not be able to hike rates until 2016 at the earliest.

Likewise, investors are wagering the Federal Reserve will find it hard to start tightening in the middle of the year, as some policy members have suggested.

In just the past three weeks, Fed fund futures have priced out 25 basis points of hikes for this year and now see just one move to 0.5 percent by Christmas.

The risk of low inflation for longer has in turn pulled down bond yields globally, with five-year debt in Germany and Japan now paying nothing at all.

One side effect of plunging bond yields is to make gold more attractive as an alternative investment.

Since gold does not pay a return, an opportunity cost for holding it is the yield forgone on safe-haven bonds. Now, that cost has diminished to the point where buying gold offers the same return as lending money to Germany for five years.

The yellow metal was was a shade softer at $1,230.00 an ounce on Wednesday after touching a three-month peak.

Copyright Reuters, 2015

]]> (Parvez Jabri) Australia Wed, 14 Jan 2015 05:20:31 +0000
London copper retreats below $6,000; nears five-year low$6000;-nears-five-year-low.html$6000;-nears-five-year-low.html imageMELBOURNE: London copper slipped back towards a five-year low below the $6,000-mark on Tuesday, shrugging off benign trade data from top metals user China as further falls in oil markets soured broader appetite for commodities.

China's exports and imports exceeded market expectations in December, a welcome sign that Beijing has found support for its cooling manufacturing sector as a stronger US economy offsets weakness in Europe and Japan.

Bargain hunters also helped to boost copper imports to the fifth-highest level ever, said Natalie Rampono of ANZ in Melbourne.

"It suggests that the Chinese are continuing to be opportunist, with low commodity prices enabling them to restock relatively low inventories across the supply chain. It does suggest that underlying demand is improving, but it's coming off quite a low base," she said.

Three-month copper on the London Metal Exchange eased 0.4 percent to $5,995 a tonne after a 1.3-percent drop the session before when it fell to its weakest since October 2009 at $5,966 a tonne. The most-traded March copper contract on the Shanghai Futures Exchange fell 1.7 percent to 43,400 yuan ($6,998) a tonne, having earlier slid by as much as 2 percent.

But traders said the oil rout had spooked copper buyers. "Copper has been quiet. Small bits yesterday on the dip but orders are just not there at the moment - I'm sure they'll all pile in once copper is $200 off the lows," said a trader in Singapore.

US crude futures extended declines for a third straight session on Tuesday, following a near 5-percent drop the previous day, after Goldman Sachs warned that prices would fall further and Gulf oil producers showed no sign of cutting output.

Alcoa Chief Financial Officer William Oplinger said on Monday that the all-in aluminium price, including benchmark future prices and regional premiums, would remain "similar to the market situation that we have today".

He added that the company was monitoring China's increased activity in the trade of semi-finished products "very, very closely".

China exported 540,000 tonnes of unwrought aluminium and aluminium products, including primary, alloy and semi-finished aluminium products, in December, up from November's 390,000 tonnes.

Selling also hit other metals, as commodity index rebalancing continues to Jan. 14, with LME nickel and lead down around half a percent. Tin, which is not affected by the rebalancing also fell half a percent.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui) Australia Tue, 13 Jan 2015 05:50:09 +0000
London copper mired near 4-1/2 year lows on growth worries imageMELBOURNE: London copper teetered towards fresh four-and-a-half year lows on Monday, with investors betting further losses were to come given stuttering demand growth in the United States and China.

US job growth increased briskly in December, but wages posted their biggest decline in at least eight years in a sign the tightening labour market has yet to give much of a boost to workers.

China's annual inflation data gave policy makers more room to ease policy to support growth. However, industrial metals should find price support form the dramatic drop in crude oil prices, which is set to spur economic activity, said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

"If I was a potential buyer, then I would be stocking up at these levels," he said. Global oil prices extended their slide on Monday, weighed by weakening demand in Europe and Asia.

Three-month copper on the London Metal Exchange traded little changed at $6,097 a tonne by 0234 GMT.

Prices on Friday fell as low as $6,073.50 a tonne, the weakest since June 2010.

The most-traded March copper contract on the Shanghai Futures Exchange slipped by 0.8 percent to 44,190 yuan ($7,130) tonne.

Copper traders are nervously eyeing two big put option trades at $6,000 and $5,500 per tonne, which they fear could accelerate the market's longest rout in years as prices sink to their lowest since 2010.

Hedge funds and money managers increased their bearish bet in copper contracts during the week to Jan. 6, US Commodity Futures Trading Commission (CFTC) data showed on Friday, CFTC data showed. Commodity index rebalancing will continue until Jan. 14.

One trader said business related to that rebalancing spurred selling of aluminium, nickel and zinc, as well as buying of copper.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui) Australia Mon, 12 Jan 2015 05:39:15 +0000
London copper ticks up from 4-1/2-year lows as oil takes breather imageMELBOURNE: London copper climbed off 4-1/2-year lows on Thursday as oil steadied, but analysts and traders said that any calm could prove short-lived and Chinese buyers were waiting for lower prices.

"(Copper's price weakness) is intertwined with the sell-off in energy prices. I think it's very possible it will go through $6,000," said analyst Daniel Morgan at UBS in Sydney.

Three-month copper on the London Metal Exchange was up 0.3 percent at $6,132 a tonne by 0343 GMT, paring losses from the previous session. Prices on Wednesday slid to the weakest since June 2010 at $6,091.50.

"I do expect a drop. Rallies have been short lived and there are too many negative factors out there... we may well see a bounce, but the trend continues lower," said a trader in Hong Kong.

The most-traded March copper contract on the Shanghai Futures Exchange was up 0.1 percent at 44,720 yuan ($7,192) a tonne.

Energy weakness has also spilled across to aluminium, for which power makes up just under half of Western production costs. LME aluminium steadied from more than seven-month lows touched on Wednesday.

Brent crude extended gains on Thursday to hold above $51 a barrel, after an unexpected fall in U.S. crude stocks snapped a 4-session decline the previous day.

New trade data released on Wednesday and signs of ever-stronger consumer spending confirmed the United States remains the bright spot in a global economy plagued by uncertainty

However, China's annual economic growth likely slowed to 7.2 percent in the fourth quarter, the weakest since the depths of the global crisis, a Reuters poll showed, which would keep pressure on policymakers to head off a sharper slowdown this year.

Elsewhere, an annual reweighting of major commodity indexes runs from Jan. 8-14 and is expected to result in sales of nickel , aluminium and zinc.

LME zinc prices rebounded half a percent after a drop of nearly 2 percent the day before.

"The market is certainly sending confusing signals with bulls pointing to good Chinese demand, while bears talk about lower physical premiums due to Chinese exports," broker Triland said in a note.

"Spreads have been widening in recent days suggesting that metal is becoming easier to find, while the technical picture reflects a general softness in the market."

Copyright Reuters, 2014

]]> (Imaduddin) Australia Thu, 08 Jan 2015 04:51:18 +0000