LME copper down 0.3pc on China export orders fall

SHANGHAI: LME copper fell 0.3 percent on Thursday, rolling back some overnight gains, weighed down by a fall in China's export orders and wider concerns about the global economy.

But supply disruption threats, hopes for the European Central Bank to cut interest rates and further quantitative easing (QE) in the US, combined with a rise in Asian equities, may limit losses.

FUNDAMENTALS

Three-month copper on the London Metal Exchange fell 0.6 percent to $9,217 a tonne by 0158 GMT, after rising 1.3 percent in the previous session.

The most-active November copper contract on the Shanghai Futures Exchange rose 0.3 percent to 68,550 yuan per tonne, catching up with overnight London gains, after rising 0.2 percent in the previous session.

China's factory activity rebounded a touch in August from a 28-month trough, but tight monetary policy at home and torpid demand abroad have dimmed chances for a sustained recovery.

The sub-index for new export orders dipped to 48.3 from 50.4 and the sub-index for overall new orders was at 51.1 -- unchanged from July. The output sub-index rose to 52.3 in August from July's 52.1.

Euro zone annual inflation was unchanged in August while the number of people without jobs grew, data showed on Wednesday, adding to expectations that the next ECB interest rate move could be a cut rather than a hike.

Concerned that Germany's parliament has little control over the European Financial Stability Facility (EFSF), some members of the centre-right coalition of German Chancellor Angela Merkel are threatening to oppose boosting its powers when the Bundestag (lower house) votes on Sept. 29.

The White House will release its delayed midsession budget review on Thursday, updating projections for the US economy ahead of a congressional review to cut the deficit by $1.5 trillion over 10 years.

Workers at Freeport-McMoRan Copper & Gold's Grasberg mine in Indonesia plan to stage a strike after talks with the company failed to resolve a pay dispute, in a move that could tighten global copper supplies and lift prices.

MARKET NEWS

Asian stocks pushed higher in early trade on Thursday in line with a firmer tone on Wall Street, extending a recovery from a sharp sell-off in August on hopes the US Federal Reserve would intervene in markets to support the economy.

Copyright Reuters, 2011