LONDON (Thomson Financial) - Copper rose in early trade after yesterday's losses, buoyed by an uptick in the equity markets this morning, and as reports of positive Chinese imports numbers counteracted fears over slowing demand prompted by yesterday's poor US home sales data.
As well as the imports figures, China released decent numbers on GDP growth -- which slowed, but remained strong -- industrial production and investment, supporting hopes demand from the Asian giant will remain firm.
"Base metals were slightly firmer during early LME trading on Thursday, stabilising together with equities after the previous day's sell-off and aided by positive Chinese data," said BaseMetals.com analysts.
Copper prices eased yesterday as weakness in the equity markets dented risk appetite and data showed US existing home sales dipped 8 pct in September.
But investors are taking advantage of the softer market to bargain hunt this morning, analysts said, while weakness in the dollar is also underpinning all the base metals.
At 10.58 am, LME copper for three-month delivery was up 75 usd at 7,765 usd a tonne.
Chinese imports data released overnight, which showed a 102,078 tonne rise in copper cathode imports in September from the previous month, has also helped allay demand fears sparked by sluggish US home sales, analysts said.
"Shanghai copper rose slightly overnight after a sharp rise in Chinese copper cathode imports of 17 pct month-on-month," said analysts at RBC Capital Markets.
China is now the world's largest market for copper, with the US taking second place. Continued strength in Chinese demand for base metals is expected to keep prices well supported in the medium term, even as US consumption falls.
Among other metals, aluminium was up 20 usd at 2,515 usd. Stocks of the metal, which have grown significantly over the last six months, eased by 2,175 tonnes to 922,700 tonnes this morning.
Lead was 65 usd higher at 3,560 usd, and zinc rose 15 usd to 2,850 usd a tonne.
Elsewhere, nickel rose 750 usd to 31,550 usd a tonne, bouncing from a significant fall yesterday after stocks of the grey metal rose and on a poor outlook for stainless steel production, as investors bought on the dips.
"The market is expecting that once stainless steel producers clear some of their stockpiles, demand will pick back up," noted BNP Paribas analyst David Thurtell.
Meanwhile tin was up 175 usd at 16,270 usd. [email protected] har/ra/har/ra
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