Mon Apr 30, 2012 11:34pm EDT
* China PMI hits 13-month high in April
* Thin trading with many Asian markets closed
* Coming Up: U.S. ISM Manufacturing PMI; 1400 GMT
(Adds China data, comments, updates prices)
By Manolo Serapio Jr
SINGAPORE, May 1 (Reuters) - Copper steadied near $8,400 a
tonne on Tuesday as brisk manufacturing data in top consumer
China helped counter concerns about a recession in Spain and a
fragile U.S. economy.
Trading was thin with most Asian markets shut for the May
Day holiday, including China, limiting the market impact of data
showing a sustained expansion in China's factory sector.
China's official purchasing managers' index rose to 53.3 in
April from 53.1 in March, signalling the world's No. 2 economy
may be quietly recovering from a first-quarter trough.
"It's a positive read and should ease some of the market
jitters coming from the euro zone of late," said Natalie
Robertson, analyst at Australia and New Zealand Bank.
"The tight supply situation has been holding up prices quite
strongly and all we need is to see a pickup in demand and prices
will continue to rally."
Three-month copper on the London Metal Exchange
slipped $20 to $8,380 a tonne by 0314 GMT, after hitting a
session high of $8,420. Volume traded on LME Select was a paltry
663 lots.
Tight global supply has helped copper gain 10 percent so far
this year given delays in additional capacity coming through to
market.
Global demand for refined copper is expected to exceed
production by 240,000 tonnes in 2012, before it reverses a
three-year trend of market deficits with a production surplus in
2013, according to the International Copper Study Group on
Monday.
CHALLENGING CONDITIONS
Copper rose to its highest in nearly a month on Monday,
hitting $8,496.75, as LME stockpiles MCU-STOCKS fell to the
lowest since October 2008, at 241,550 tonnes.
Because of tighter LME supplies, which have sharply pushed
up premiums of spot prices over those for later deliveries,
large Chinese copper smelters said they will sell refined copper
to LME warehouses over the next two months.
The premium for LME cash copper against three-month delivery
material MCU0-3 soared to $149 per tonne on Friday, the
highest since August 2008.
The supply deficit should help copper prices, which have
fallen more than 4 percent from the 2012 peak of $8,765, recover
in the second half, said Credit Suisse.
"For the very near term, it will be important for the market
to defend the $7,900/$8,000 support in order to prevent another
bout of weakness," Credit Suisse said in a note.
The challenging economic conditions are taming some copper
bulls. While China's economy is showing some signs of perking up
this quarter, the U.S. economy appeared to downshift, with
consumers increasing their spending only modestly last month and
a gauge of business activity in the Midwest falling sharply in
April.
There was more bad news out of Europe on Monday after Spain
sank into recession in the first quarter and economists say
spending cuts and a reeling bank sector would delay any return
to growth until late this year or beyond.
Base metals prices at 0314 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8380.00 -20.00 -0.24 10.26
HG COPPER MAY2 381.90 -1.45 -0.38 11.15
LME Alum 2115.00 -4.00 -0.19 4.70
LME Zinc 2049.25 -12.75 -0.62 11.07
LME Nickel 17900.00 5.00 +0.03 -4.33
LME Lead 2145.00 -3.00 -0.14 5.41
LME Tin 22720.00 -55.00 -0.24 18.33
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