Copper at lowest in 1-1/2 years after Chinese data

By Maytaal Angel and Melanie Burton

LONDON/SINGAPORE (Reuters) - Copper fell to its lowest in a year and a half on Monday after disappointing data from top consumer China and weak U.S. data last week increased worries about a global growth slowdown.

China's economic recovery unexpectedly stumbled in the first three months of 2013 as the annual rate of growth eased back to 7.7 percent from the 7.9 percent pace set in the final quarter of last year, official data showed on Monday.

Industrial output in March also undershot expectations and added to investor sensitivity after a negative reading of U.S. consumer sentiment, soft retail sales and rekindled worries about sovereign debt in the euro zone late last week.

Three-month copper on the London Metal Exchange fell to $7,085 a tonne, its lowest since October 2011. It was trading at $7,166 a tonne at 1028 GMT, down 3.25 percent on the day and some 10 percent for the year.

Aluminium fell to its lowest in three and a half years at $1,818 a tonne, while tin fell nearly 7 percent to $20,500, its lowest since late November 2012.

LME nickel fell to its lowest in more than seven months, while lead and zinc slumped to their lowest in five months.

"The Chinese market is being kept up by credit invested in state-owned enterprises, though even that wasn't enough to keep GDP on track to where the market expected it to be in Q1," said Tom Kendall, an analyst at Credit Suisse.

"We have a Q4 average of $7,000 a tonne for copper, because essentially demand is growing sluggishly and supply is rising."

Slowing factory output and investment spending in China has led analysts to start slashing full-year growth forecasts for the world's second-largest economy, despite official insistence that the outlook was favourable.

"Citi expects 2013 to be the year in which the death bells ring for the commodity supercycle after its duly noted sunset, ushering in a new decade of opportunities based on how individual commodities will perform against one another and against broader market indicators," said the bank in a note.

China consumes about 40 percent of the world's copper.

In the United States meanwhile, retail sales contracted in March for the second time in three months, while consumer confidence tumbled in April, a sign that tax hikes early this year stole momentum from the economy.

Shanghai copper hit 54,180 yuan a tonne, a 10-month low.

LITTLE SUPPORT FROM SUPPLY OUTAGES

A spate of supply-side problems offered little support for copper, unlike in previous years, as the market heads for its first year of surplus in several years, and inventories of refined metal are near decade highs both in London and Shanghai.

In the United States, a landslide at Rio Tinto's Bingham Canyon mine in Utah extended further into the pit than predicted, and there was greater

Source: http://news.yahoo.com/copper-lowest-1-1-2-years-chinese-data-113524559--finance.html

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