China: Metals rebound after days of losses

Three-month LME copper rose to $9,456 on Tuesday, snapping a five-day losing streak as long-term bulls resurfaced, while supply tightness eased, with the cash-three month spread moving into a $9/14 backwardation after recording a $70 backwardation in mid-December.

The pick-up in confidence over the US recovery that is emerging should be good for the industrial metal demand, but there is concern that growth rates in China will slow which could counter the bullish arguments, William Adams, analyst at FastMarkets, said on Tuesday. However, the real test would come if China went into a more meaningful destocking phase - this could happen if monetary policy is tightened at a fast pace

Markets digested more Chinese economic data on Tuesday, with new loans rising more than forecast to RMB 481 billion, surpassing analysts expectations, while money supply also climbed more than forecast.

On Monday, trade surplus figures indicated that Chinese copper imports fell to 344,558 tonnes in December from 369,370 tonnes a year earlier amid rising domestic inventories, while traders analyzed how ample physical supply and tighter monetary policy in China was likely to dampen momentum.