Tue Jul 22, 2008 10:54am EDT * Copper market seen in deficit, prices buoyed
* Lead hits 9-wk high on drop in Chinese exports
* Aluminium bounces as supply worries resurface
By Julie Crust
LONDON, July 22 (Reuters) - Copper rose on Tuesday as worries about supply shortages resurfaced, while lead surged to a 9-week high after Chinese data showed a drop in first-half exports and aluminium prices bounced.
Copper MCU3 traded at $8,155 a tonne at 1404 GMT on the London Metal Exchange (LME) from $8,120 on Monday, while U.S. copper for September delivery traded up 1.10 cents at $3.6920 a lb on the New York Mercantile Exchange.
News that refined copper demand in top consumer China totalled 2.43 million tonnes in the first half, up by 112,257 tonnes from a year earlier was also influencing sentiment. [ID:nHKG285902]
However, China's consumption growth slowed to an annual rate of 4.8 percent, raising worries that this year's demand growth will be lower than the 7-15 percent many analysts predicted. [NI:nHKG285902]
A Reuters poll of 22 commodity analysts around the world released on Tuesday forecast the copper market would see a 68,000 tonne deficit in 2008, against predictions for a 144,500 tonne surplus from a similar survey in January. [MET/POLL]
"The copper market remains quite tight and we are forecasting a deficit for this year," said Standard Chartered analyst Daniel Smith.
"However, we think the market could turn with prices coming lower, perhaps in the fourth quarter or even earlier as Chinese of copper have been quite low."
Lead MPB3 traded at $2,120.25 a tonne against $2,050, after earlier hitting $2,160 a tonne, the highest since May 22.
Chinese exports of refined lead dropped 96 percent in June and fell 80 percent in the first half. [ID:nPEK277912]
"Net lead exports to the west from China were at their lowest this decade in June," said Nick Moore, analyst at ABN AMRO. "China is the largest producer and consumer of lead so anything out of there tends to feed in quite quickly."
Falling stocks of lead have helped the battery-material this week. Lead stocks in LME warehouses fell 650 tonnes to 91,375, down about 10 percent since July 9.
"Lead consumption is growing on demand for batteries in both India and China," said Alex Heath, analyst at RBC Capital Markets. "The car industry as a whole, in terms of western producers, is flagging, but people still need new batteries for their old cars."
ALUMINIUM RECOVERS
Aluminium firmed on Tuesday as worries about supplies from China resurfaced. Aluminium MAL3 traded at $3,046 a tonne from $3,045 on Monday when it fell to a 5-week low of $3,014.
Expectations of an oversupplied market and falling oil CLc1 and rising stocks have hit prices of the metal.
However, the metal used in transport, construction and power has been boosted this year by worries about supplies from China, the world's top producer, where power disruptions have hit smelters.
Analysts polled by Reuters in July now predict a market surplus of 148,500 tonnes of aluminium, dropping from predictions for a 325,000 tonnes surplus in January.
China has forecast a power shortfall of 10 gigawatts for the summer, about 1.4 percent of installed capacity, but provinces are forecasting more than triple this. [ID:nPEK98235]
Aluminium has risen by 27 percent since the start of the year. Prices hit an all-time high of $3,380 a tonne on July 10 after China's 20 largest smelters announced production cuts of up to 10 percent in a bid to conserve energy.
News that China's exports of primary aluminium fell 30 percent in June and declined 65 percent in the first half would help support prices, traders said. [ID:nPEK281630]
Zinc MZN3 traded at $1,870 a tonne from $1,865, nickel MNI3 edged up to $20,575 from $20,550 and tin MSN3 was at $23,490 from Monday's last quote of $23,500/23,600.
OXR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
