Copper moves higher

Copper rose on Wednesday, but trimmed its gains on a resurgent dollar, as the approach of a holiday amid expectations of tighter monetary policy in top consumer China checked investor enthusiasm. Tin hit a record high of $28,775 a tonne as the market tried to price in scarcity of supplies from top exporter Indonesia.
It has risen about 6 percent so far this year after a gain of nearly 60 percent in 2010. "Clearly of all base metals tin has best fundamentals," said Nic Brown, an analysts at Natixis. Benchmark copper on the London Metal Exchange was last quoted at $9,325 a tonne from $9,250 on Tuesday, when the metal used in power and construction fell to a one-month low of $9,234.85 a tonne.
The dollar rose to a session high versus the euro and yen on Wednesday after data showed new US single-family home sales in December rose faster than expected to their highest level in eight months. "We are in a seasonal slowdown. There are public holidays in China and concerns over monetary tightening," said VTB Capital analyst Andrey Kryuchenkov.
Growth in China accelerated in the fourth quarter and its inflation slowed less than expected, fuelling concerns that harsher policy tightening is needed. Also weighing on copper are rising stocks in LME warehouses, which at 394,700 tonnes are at their highest since September and up more than 10 percent since December 9. The stocks have risen around 3.5 percent in the past two days alone. "Copper inventories are building ... It is logical to see a short-term pullback...," Kryuchenkov said.
Exchange open interest on copper futures at the LME stands at 305,551 lots or more than 7.64 million tonnes from 324,420 lots or more than 8.11 million tonnes on January 14. Heavy rains that have hampered tin output in recent months in Indonesia, the world's second-largest producer after China, are easing and output in Indonesia's main tin producing area Bangka island remained normal on Wednesday.
But traders say concern about exports from the country remain. Also helping boost tin sentiment was a survey by consultants ITRI showing that global tin consumption rose 12.5 percent last year. Three-month tin closed at $28,625 a tonne from $28,195 a tonne at the close on Tuesday.
Lead was $2,376 a tonne from a last bid at $2,336 a tonne on Tuesday when the battery material touched a low of $2,325 a tonne, its lowest since December 8. It has come under pressure from stocks in LME warehouses, which at 275,300 tonnes are their highest since May 1995.
However, LME data shows one company controlling 80-90 percent of lead stock warrants and cash contracts, which has fuelled nervousness about nearby supplies. That is why the premium for the cash contract over the three-month contract is around $50 a tonne, down from $60 on Tuesday, but still near highs seen in November 2007. Zinc was quoted at $2,278 a tonne from $2,221 on Tuesday, nickel was $26,500 from $25,900 and aluminium was $2,387 from $2,361.