Copper slips on new Japan quake

Copper reached five-week highs on Monday as a weaker dollar and robust imports by top consumer China boosted investor appetite for the metal, but then turned lower after news of another strong earthquake in Japan. Initially tracking copper, aluminium jumped to $2,720 a tonne, a level last seen in August 2008, and lead touched $2,904 a tonne, its highest since April 2008. Tin hit a record high of $33,600 a tonne.
Benchmark copper on the London Metal Exchange hit $9,944.75 a tonne, the highest since March 4. The metal used in power and construction closed at $9,855 a tonne from $9,875 at the close on Friday. "All the markets were up overnight and after good Chinese data. They were all following the dollar," said RBC Capital's head of base metals Alex Heath, adding that the latest earthquake in Japan had then spurred some selling.
A big tremor shook buildings in Tokyo and a wide swathe of eastern Japan on Monday, knocking out power to 220,000 households and causing a halt to water pumping to cool three damaged reactors at Fukushima. The latest earthquake rattled investors after the March 11 quake and tsunami sparked the worst nuclear crisis since Chernobyl, a trader said.
"Coming (the new earthquake) on top of everything else in Japan, it does beg the question of the impact on growth. Japan is a key cog in the world economy," the trader said. Stocks of copper in LME warehouses at 445,700 tonnes are up about 18 percent since the end of last year and the highest since early last July.
Helping sentiment was a 29.2 percent rise in imports of copper by China to 304,299 tonnes in March from 235,469 tonnes in the previous month. "Copper looks set to test the $10,000 a tonne mark again, supported by strong import figures from China," Commerzbank said in a note. "February appears to have been a negative anomaly ... and fears of a downturn of demand have not been confirmed.
The metal hit its high of $10,190 in February. The data alleviates some fears that China's absence from the copper market would be prolonged, but doubts remain and many point to high stocks in Shanghai. China is the world's largest consumer of copper, accounting for about 40 percent of global demand estimated at around 21 million tonnes this year.
"The picture (for Chinese imports) is similar with aluminium," Commerzbank said. China is also the world's largest producer and consumer of aluminium used in transport, construction and packaging. Aluminium has been boosted in recent weeks by surging power costs, which account for about 35 percent of smelting costs. It closed at $2,689 a tonne from $2,713 at the close on Friday.
Lead finished at $2,855 from $2,850 a tonne. Prices have been reinforced by expectations of strong demand for battery-powered electricity in Japan where the earthquake and tsunami have crippled nuclear power plants. Tin, untraded in rings, was bid at $33,290 a tonne from $33,050. Falling supplies of tin ore to independent smelters in Bangka island because of rain and police raids on illegal miners have hampered mining in Indonesia, the world's largest exporter, and raised concern about world supplies. Zinc finished at $2,545 a tonne from $2,532, and nickel ended at $27,705 from $27,600.