Copper bouyed by supply worries, lead hits 9-week high

Tag : refined copper

By Julie Crust
LONDON (Reuters) - Copper was buoyed on Tuesday as worries aboutsupply shortages resurfaced, while lead jumped to a 9-week highafter Chinese data showed a drop in first-half exports andaluminium prices bounced.
Copper traded at $8,225 a tonne in official rings on the LondonMetal Exchange from $8,120 on Monday.
Helping sentiment was news that refined copper demand in topconsumer China totalled 2.43 million tonnes in the first half, upby 112,257 tonnes from a year earlier.
"The data confirmed what people know, that the market for copper isin a deficit - the question is how much," said Alex Heath, analystat RBC Capital Markets. "The market is still very tight."
However, China's consumption growth slowed to an annual rate of 4.8percent, raising worries that this year's demand growth will belower than the 7-15 percent many analysts have expected.
Lead traded at $2,145 a tonne, after hitting $2,160 a tonne -- thehighest since May 22 -- against $2,050.
Chinese exports of refined lead dropped 96 percent in June and fell80 percent in the first half.
"Net lead exports to the west from China were at their lowest thisdecade in June," said Nick Moore, analyst at ABN AMRO. "China isthe largest producer and consumer of lead so anything out of theretends to feed in quite quickly."
Falling stocks of lead have helped the battery-material this week.Lead stocks in LME warehouses fell 650 tonnes to 91,375, down about10 percent since July 9.
"Lead consumption is growing on demand for batteries in both Indiaand China," Heath said. "The car industry as a whole, in terms ofwestern producers, is flagging, but people still need new batteriesfor their old cars."
ALUMINIUM RECOVERS
Aluminium bounced on Tuesday as worries about supplies from Chinaresurfaced. Aluminium traded at $3,072 a tonne from $3,045 onMonday when it fell to a 5-week low of $3,014.
Expectations of an oversupplied market and falling oil and risingstocks have hit prices of the metal.
However, prices of the metal used in transport, construction andpower have been boosted this year by worries about supplies fromChina, the world's top producer, where power disruptions have hitsmelters.
"Ongoing power problems in China are hitting all the non- ferrousindustries -- not just aluminium," said Heath.
China has forecast a power shortfall of 10 gigawatts for thesummer, about 1.4 percent of installed capacity, but provinces areforecasting more than triple this.
Aluminium has risen by 27 percent since the start of the year.Prices hit an all-time high of $3,380 a tonne on July 10 afterChina's 20 largest smelters announced production cuts of up to 10percent in a bid to conserve energy.
News that China's exports of primary aluminium fell 30 percent inJune and declined 65 percent in the first half would help supportprices, traders said.
Zinc traded at $1,895 a tonne from $1,865, nickel was unchanged at$20,550 and tin at $23,575 from Monday's last quote at$23,500/23,600.