Copper in Shanghai on Track for First Weekly Decline in Three

By Glenys Sim

May 15 (Bloomberg) -- Copper futures in Shanghai headed for the first weekly loss in three after weaker-than-expected economic data in the U.S. and China, the largest users of the metal, spurred concern the global recession may be protracted.

Futures are down 6.6 percent this week as China’s industrial production and U.S. retail sales came in below forecasts. China’s copper imports reached a record last month even as the country’s export slump deepened, raising concern supply may outpace consumption.

“The data showed that the tug-of-war between the slowdown of China’s exports and the increase in fixed asset investment continued to drag the Chinese economy in opposite directions,” Na Liu, analyst at Scotia Capital, wrote in a report e-mailed today.

Copper for August delivery on the Shanghai Futures Exchange, the most active contract, rose as much as 2.2 percent to 36,280 yuan ($5,316) a metric ton, and traded at 35,820 yuan at 11:12 a.m. in Singapore.

Copper for three-month delivery on the London Metal Exchange gained as much as 0.9 percent to $4,484 a ton, before trading 0.1 percent lower at $4,440. That’s a 5.2 percent decline for the week.

“As the two forces offset each other, China’s industrial production growth remained stalled, but at the same time, China’s commodity imports surged,” said Liu. “This is partially because economic growth driven by investment is a lot more commodity-intensive than growth driven by exports.”

Among other LME-traded metals, aluminum and zinc were little changed at $1,533 a ton and $1,503 a ton respectively. Nickel fell 1.1 percent to $12,410 a ton, while tin gained 0.4 percent to $13,650. Lead hadn’t traded as of 11:15 a.m. in Singapore.

To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net