London copper edges up on US stimulus hopes

Reuters reported that London copper firmed after weaker than expected US retail sales backed the view the US Federal Reserve will hold off on reducing monetary support anytime soon.

Markets are waiting for Mr Ben Bernanke chairman of Fed to testify to Congress this week for further signals on when the US central bank plans to scale back its huge bond buying program which has been bolstering demand for commodities.

Mr Alexandra Knight economist at National Australia Bank in Melbourne said that "At this stage it looks like we're still seeing a bit of an improvement in the US economy so the chances are that tapering will begin before the end of the year."

He said that potentially that could restrict liquidity and have an impact on the real economy. Initially it could be perceived negatively in the metals markets and dampen prices.

Three month copper on the London Metal Exchange had climbed 0.67 percent to USD 6,966.50 per tonne by 0704 GMT after falling half a percent in the previous session.

Copper prices hit a nearly 1 month high at USD 7,049.25 per tonne on July 11 but have failed to gain traction above USD 7,000 and remain down more than 12% for the year. he most traded November copper contract on the Shanghai Futures Exchange climbed 0.60 percent to close at CNY 50,250 per tonne.

US retail sales rose less than expected in June, the latest sign of a slowdown in economic growth that offers a cautionary note to the Fed as it mulls scaling back its monetary stimulus.

Underlining a softening outlook for metals demand, the Asian Development Bank said that it has lowered its growth forecasts for developing Asia this year and the next as a softer outlook for the world's No.2 economy China meant subdued economic activity elsewhere in the region.

Also blurring the picture for copper demand, a crackdown in China aimed at curbing distorted credit growth has triggered growing appetite for the use of commodities as collateral to raise cash inflating copper imports.

At the same time, supply is improving. Turquoise Hill Resources Limited said that it expects Mongolia's Oyu Tolgoi to produce between 75,000 tonnes and 85,000 tonnes of copper in concentrates for the year as the huge mine ramps up.

2013/07/17 14:00:00 Source：《reuters》