Copper moves higher

Copper rose on Thursday as investors grew confident that Greece would complete a debt swap deal to avoid a chaotic default and as a weaker dollar supported base metals. Benchmark copper on the London Metal Exchange (LME) ended up 0.42 percent at $8,330 a tonne, from a close of $8,295 on Wednesday.
Investors welcomed news that major banks and pension funds have thrown their weight behind Greece's bond swap offer to private creditors, making it increasingly likely that the deal will pass and clear the way for a bailout package to avert an immediate default on its debt.
The European Central Bank meanwhile kept its benchmark interest rate at 1 percent earlier on Thursday, although it further reduced its forecast for growth this year, according to new staff forecasts which also raised its outlook for inflation for 2012/2013. Meanwhile in the United States, new claims for unemployment benefits unexpectedly rose last week, though the data was not enough to change perceptions that the labour market was improving.
"Things are improving from a macro economic perspective and there's lot of problems on the supply side for copper. Physical premiums in Shanghai are moving up," said Standard Chartered analyst Dan Smith. A weaker US currency makes it cheaper for holders of other currencies to buy dollar-priced commodities such as base metals.
In industry news, Marcelo Awad, the veteran boss of Chilean copper miner Antofagasta Plc, resigned on Wednesday, surprising investors with his abrupt departure. "Probably his exit is partially due to the difficulties and delays ramping up mining output. This points to the fact that it's hard for miners to increase production, which is particularly evident in copper," said Commerzbank analyst Daniel Briesemann said.
Emphasising tight supply, the world's top copper producer, Chile's Codelco, said this week it sees output dipping slightly. Also, Freeport-McMoRan Copper & Gold Inc said late on Wednesday sales and deliveries of concentrate will continue to be hit until the company is able to return to normal production levels. Grasberg mine operations were suspended by Freeport on Feb. 23 because of work disruptions following a strike.
Copper prices have risen as much as 15 percent since the beginning of the year after a 23 percent fall in 2011. The run-up however has lost some steam and prices have fallen in the last couple of weeks on worries over lower demand from China, a major buyer, which increased after the country cut its growth target for 2012.
China consumes about 40 percent of global copper supply. "While the reduced growth target for the Chinese economy continued to weigh, we would note that metals specific news flow came in supportive," Credit Suisse said in a note. "For instance, inventories at the London Metal Exchange registered renewed outflows across most metals, suggesting physical demand to be firm."
Inventories of copper in warehouses monitored by the LME fell by 875 tonnes to 280,025 tonnes, a fresh 2-1/2 year low, latest data showed. This points to improving demand in Europe and the US but rising stocks in warehouses monitored by the Shanghai Futures Exchange show a weaker demand pattern in Asia, analysts said.
For more hints on the state of the global economy investors will focus on US non-farm payroll jobs figures on Friday. In other metals, tin was last bid at $22,750 from $22,250 and zinc ended at $2,049 from $2,015 at Wednesday's close. Battery material lead closed at $2,124 from $2,090 and aluminium ended at $2,206 from $2,209.
Nickel closed at $18,975 from $18,800.