Copper hits near 2-month high on China data

Dec 10 2012, 15:27 IST
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SummarySigns of renewed vigour in China's factories have brightened the demand outlook for industrial metals.

bank forecast barely any economic growth in 2013, and flagged risks of a recession in the euro zone's biggest economy as the debt crisis hits the bloc's core.

A weaker euro makes commodities more expensive for holders of other currencies.


China's copper demand remains soft amid expectations the country will export more metal next year, after exporting a monthly average of 23,000 tonnes so far this year, Barclays Capital said.

"We believe exports will become more regular, perhaps

averaging 10,000 to 15,000 per month, with smelters having negotiated...tolling exports," it said in a note.

"While such a development is likely to weigh on LME

prices...the reduced cost of exporting copper is likely to

constrain the size and sustainability of a backwardation in LME time spreads," it said.

China's copper smelters stepped up refined copper exports following a tax adjustment over summer that reduced their costs to export and made such trades more attractive.

China's copper imports rose 13.5 percent in November from the previous month, while its crude oil purchases edged down 1.3 percent, customs data showed.

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