* Copper off 0.4 pct in holiday-thinned trade
* Coper faces resistance at $8,655-technicals
* Coming Up: U.S. durable goods orders; 1400 GMT
(Adds comments, updates prices)
By Manolo Serapio Jr
SINGAPORE, April 3 (Reuters) – Copper held near two-week
peaks on Tuesday as positive manufacturing data in the United
States and China kept investors’ upbeat mood mostly intact in
slow trading in Asia.
Copper rose more than 2 percent on Monday, its biggest
single-day gain since February, although thin trading volumes –
with China shut for a public holiday – made it difficult for the
industrial metal to extend the rally.
Three-month copper on the London Metal Exchange
slipped 0.4 percent to $8,610 a tonne by 0357 GMT, its first
loss in four sessions.
But the session’s high of $8,623 was in striking distance of
a two-week high of $8,653 touched on Monday.
Prices need to fall at least 5 percent to encourage more
buying, said Dominic Schnider, executive director for wealth
management research at UBS.
The combination of data showing Chinese manufacturing
activity at an 11-month high and a forecast-beating U.S. ISM
factory activity index fueled Monday’s rally.
But Schnider said it may be too early to say both the U.S.
and Chinese economies have turned the corner.
“The Chinese PMI data is so volatile so I would be rather
cautious and U.S. construction spending, which is a real, hard
number compared to ISM, remains weak,” he said.
The U.S. ISM data also showed some hints of weakness. The
indices for new orders and exports slipped, while inventories
rose, pointing to softening demand.
Technical charts also suggest copper is facing resistance at
$8,655.
Trading volume was an extremely lean 604 lots on LME Select,
with Chinese financial markets shut for a three-day public
holiday through Wednesday. Shanghai reopens on Thursday.
Upbeat U.S. and Chinese manufacturing numbers helped counter
data in the euro zone where factory activity shrank for an
eighth straight month, underscoring the uneven pace of global
economic growth.
But copper’s modest losses on Tuesday suggest investors may
be ready to bid up prices again, given a brighter economic
outlook and still tight global supplies. Copper has gained more
than 13 percent so far this year, but had held a fairly tight
range for the past two months.
The LME cash-to-three month spread
has been in
backwardation since early March, meaning prices for nearby
delivery are higher than for further forward months, with cash
copper at a $21 premium over three-month material on Monday. The
backwardation narrows but extends through May-June, pointing to
tightness in immediate supplies.
Base metals prices at 0357 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8610.00 -30.00 -0.35 13.29
HG COPPER MAY2 391.45 -0.65 -0.17 13.93
LME Alum 2131.50 1.50 +0.07 5.52
LME Zinc 2007.75 -0.25 -0.01 8.82
LME Nickel 18230.00 5.00 +0.03 -2.57
LME Lead 2060.00 0.00 +0.00 1.23
LME Tin 23100.00 -150.00 -0.65 20.31
(Reporting by Manolo Serapio Jr.; Editing by Richard Pullin)
