Reuters reported that London copper was steady and was set to close the week little changed as traders focused on the progress in US talks to avert a looming fiscal crisis while also waiting for a crucial jobs report from the world's largest economy.
China's industrial production figures that will be released at the weekend and a US rate meeting next week by the Federal Open Market Committee are the other key events on the radar that will be scrutinized for signs of economic recovery and clues on future policy path.
Mr Nick Trevethan senior commodity strategist at ANZ in Singapore said that China data of late has been looking relatively positive. The wild card is the FOMC. We think that they may talk about extending the QE program that could be a little positive for commodities in general. That said, fiscal cliff worries are likely to keep a lid on things for the most part. We are looking to see a small pull back by the end of the year."
Three month copper on the London Metal Exchange traded at USD 8,011 per tonne by 0707 GMT, little changed from the previous session when it fell nearly 1%. Copper has rallied more than 5% since mid November and touched its highest in more than 6 weeks at USD 8,095.75 per tonne hit.
The most traded March copper contract on the Shanghai Futures Exchange closed nearly flat at CNY 57,450 per tonne. With little to show after a month of posturing, the White House and Republicans in Congress dropped hints on Thursday that they had resumed low level private talks on breaking the stalemate over the fiscal cliff but refused to divulge details.
Traders hope Washington will eventually avert some USD 600 billion of tax hikes and spending cuts scheduled to start in January that threaten to tip the economy back into recession but they are turning risk averse as the deadline draws closer with no agreement in sight.
The spotlight is now on non farm payrolls data that is expected to show US job growth slowed sharply in November as superstorm Sandy disrupted economic activity, making it hard get a clear picture of a labor market. Copper prices may get a boost if data from top consumer China reinforces the belief that growth is reviving in the world's second largest economy.
A Reuters poll showed that China's annual growth in factory output, investment and retail sales may have gained pace in November on recent pro growth policies. Curbing metals upside, the euro languished at one week lows against the greenback on Friday having suffered a major setback after the European Central Bank painted a bleak outlook for the euro zone and discussed cutting interest rates.
Macquarie said that TERM DEALS Traders were busy putting together term shipment deals for 2013 with Chinese smelters and miners likely to forge agreements of USD 70 per tonne and 7 cents per pound for treatment and refining charges. China's smelters received term 2012 TC and RC at USD 60 and 6 cents from BHP for Escondida concentrates and USD 63.5 and 6.35 cents from Freeport both seen as benchmarks in Asia.
Global miners pay TC and RC to smelters to convert concentrate into refined metal and the charges are deducted from the sale price based on LME copper prices. Higher charges are typically seen when concentrate supply rises. The actual settlement for the benchmark contract for 2013 will be somewhere around the spot market implying a small increase of global copper mine supply next year and still lower level of concentrates inventory at Chinese smelters.
Market talk that Peru's Antamina, one of the world's biggest copper and zinc mines was suffering from production problems was not completely accurate.
A mine spokesman said that we do not have a problem with the sag mill. We have experienced a problem with one of our ball mills. We have all the parts required for the repair on site and there has been no impact on production and we don't expect any major impact on production.
