Copper bounces on equities, China import data

MANILA – Copper rebounded yesterday, cheered by a recovery on Wall Street and data showing China imported a record amount of the industrial metal last month to build reserves.

Also aiding prices are comments from a senior official of China’s central bank, who said the world’s third largest economy may have hit bottom in October-December last year and has seen signs of recovery in the first quarter.Copper rose to six-month highs last week, and is up more than 48 per cent in London and nearly 59 per cent in Shanghai year-to-date, supported largely by buying from China, the world’s biggest consumer of the metal.But with signs of recovery limited to China and demand from the rest of the world likely to remain sluggish for some time, analysts say the recent rally looks unsustainable.’Copper’s been the word of the day for the last two or three months but it’s starting to lag off now,’ said Akhilesh Kamkolkar, head of futures at Halifax Investments in Sydney.’I’d be selling into any rallies right now.’Shanghai copper for delivery in July rose 1,4 per cent to 37 880 yuan (US$5 546) a ton by the midday close, after sliding by its five per cent daily limit on Tuesday when a surge in soured loans at the largest US bank renewed worries about the state of the banking sector and the global economy.Third-month copper on the London Metal Exchange gained US$35 to US$4 540 per ton.LME copper was last bid at US$4 505 on Tuesday, recovering from the session low of US$4 369 as equities rebounded after US Treasury Secretary Timothy Geithner said most US banks had sufficient capital to keep lending. RECORD IMPORTSChina’s imports of refined copper rose to a record 296 843 tons in March, topping the 270 948 tonnes set in February on state and private stockpiling.But Judy Zhu, commodity analyst at Standard Chartered Bank, said she expects Chinese copper imports to fall in coming months with the State Reserves Bureau (SRB) probably slowing down on its stock-building efforts.’Current LME prices are too high for the SRB to keep on buying, so it might be on the sidelines for now,’ she said.Another reason China’s commodity buyer could be out of the market is because it may have exceeded its target to buy around 300 000 tons of refined copper in the first quarter, added Zhu.And real demand may take a while to pick up, even in China, despite the government’s stimulus package, said Kamkolkar from Halifax.’It’s all well and good, this stimulus plan, but the numbers aren’t showing any real signs of recovery, other than the fact that they’re just printing more money in order to stockpile copper.’But for what? What else are they going to build?.’ -Nampa-Reuters