Copper steadies on China move, firm dollar offsets

Tue May 22, 2012 8:52am EDT
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By Susan Thomas

LONDON (Reuters) - Copper steadied on Tuesday as reports that top metals consumer China will fast-track infrastructure investments offset a firmer dollar and uncertainty about Europe's ability to resolve its debt crisis.

Three-month copper on the London Metal Exchange touched a week-high of $7,816 a metric ton (1.1 ton) in the session, before easing to $7,741 in official rings from Monday's $7,731 close.

One of the price supports for copper on Tuesday was a report in the state-backed China Securities Journal that Beijing will speed up approval of infrastructure investments to combat slowing growth and a sluggish property sector. Copper is used extensively in construction.

Premier Wen Jiabao has also called for additional efforts to support growth, signaling Beijing's willingness to take action after recent data suggested the world's No. 2 economy would slow further in the second quarter.

"I would have thought this would have been more bullish for the market. It shows that sentiment is not terribly bullish at the moment for the metals market," said Standard Chartered analyst Dan Smith.

"You've got one potentially very bullish event set against continued worries about the outlook."

The Organisation for Economic Co-operation and Development said on Tuesday China's growth is likely to slow to 8.2 percent this year, its weakest in more than a decade.

The slowdown in its economy has already weighed particularly hard on the commodities market.   Continued...

A worker checks a shipment of copper inside the plant at the copper refinery of Codelco Ventanas in Ventanas city, about 164 km (101 miles) northwest of Santiago, April 16, 2012. REUTERS/Eliseo Fernandez