* Upbeat U.S. jobless claims, housing starts boost markets
* Japan’s Pan Pacific, miners agree on 10 pct rise in TC/RCs for 2013
* China Q4 GDP, December industrial output, retail sales due Friday
By Susan Thomas and Harpreet Bhal
LONDON, Jan 17 (Reuters) – Copper rose more than 1 percent on Thursday,
after encouraging housing and labour market data from the United States boosted
optimism about the pace of recovery in the world’s largest economy and bolstered
the outlook for metals demand.
Figures showed the number of Americans filing new claims for unemployment
benefits tumbled to a five-year low last week, while separate data showed a
surge in residential construction last month, suggesting the housing market was
now positioned to support the economy’s recovery this year.
This helped lift the metal used in power and construction to session highs,
with benchmark copper prices on the London Metal Exchange rising to an
intraday high of $8,054 a tonne, up 1.3 percent from Wednesday’s close of
$7,946.
“The way things are going at the minute, the U.S. housing market looks to be
one of the best parts of the U.S. economy,” said Nic Brown, head of commodities
research at Natixis.
“It looks to us like a large inventory cycle is finally turning in favour of
a tighter U.S. housing market which therefore requires more new houses to be
built. It’s a cycle which will boost activity and boost credit creation.”
U.S. stocks hit a five-year high at the open after the data, while the
dollar was weak against the euro
A weak dollar makes commodities priced in the U.S. unit cheaper for holders
of other currencies.
Copper prices hit their highest level in more than two months earlier in
January following a deal by U.S lawmakers to avoid a “fiscal cliff” of spending
cuts and tax increases.
But prices have since retreated on fears the U.S. Federal Reserve may rein
in easing measures sooner than expected and caution ahead of upcoming U.S. debt
ceiling negotiations.
CHINA DEMAND
Keeping gains in check was uncertainty about the outlook for demand from top
consumer China, where traders and analysts expect buying to remain subdued until
after the week-long Lunar New Year holiday in mid February.
While a Reuters poll showed top metal consumer China’s annual economic
growth is forecast to have quickened to 7.8 percent in the fourth quarter, the
recovery is likely to be tepid and the economy may need continued policy
support.
“As the year progresses I think what you’ll start to see is that the upturn
in Chinese economic growth will not feed through into sustained strength in
commodities demand,” Ross Strachan, an economist at Capital Economics, said.
“The double digit growth rates we have seen (in China) in the past is not
likely to return.”
Decreased appetite for copper in China is evident in official statistics,
which showed that December imports fell after a year spent accumulating
stockpiles of the metal.
Analysts estimate copper stocks in bonded warehouses in China are at around
800,000-900,000 tonnes, or three times the amount currently held in London Metal
Exchange (LME) warehouses.
At the same time mine production is improving, with Credit Suisse seeing
growth of 5-6 percent this year.
This is also being reflected in rising fees for smelters, which have gained
the upper hand in negotiations over processing fees with miners this year.
Japan’s biggest copper smelter, Pan Pacific Copper, and China’s top
smelter, Jiangxi Copper, have won rises of more than 10 percent in
copper concentrate treatment and refining charges from major miners, company
sources said, reflecting a recovery in copper mine supply after years of
deficit.
Global miners pay TC/RC to smelters to convert concentrate into refined
metal, with the charges deducted from the sale price, based on LME copper
prices. Higher charges are typically seen when concentrate supply rises or when
smelter capacity thins.
In other metals benchmark aluminium rose to $2,049 a tonne from
Wednesday’s close of $2,045, while tin climbed to $25,150 from $24,995.
Lead was at $2,275.75 from $2,266 on Wednesday and nickel at
$17,494 from $17,400. Zinc climbed to $2,003 from a last bid of $1,979
on Wednesday.
Metal Prices at 1505 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in
yuan/T
Metal Last Change Pct Move End 2012 Ytd Pct
move
COMEX Cu 364.55 4.75 +1.32 365.25 -0.19
LME Alum 2053.75 8.75 +0.43 2073.00 -0.93
LME Cu 8031.50 85.50 +1.08 7931.00 1.27
LME Lead 2279.75 13.75 +0.61 2330.00 -2.16
LME Nickel 17503.00 103.00 +0.59 17060.00 2.60
LME Tin 25125.00 130.00 +0.52 23400.00 7.37
LME Zinc 2004.50 10.50 +0.53 2080.00 -3.63
SHFE Alu 15240.00 -15.00 -0.10 15435.00 -1.26
SHFE Cu* 57740.00 -200.00 -0.35 57690.00 0.09
SHFE Zin 15265.00 0.00 +0.00 15625.00 -2.30
