LONDON (Reuters) - Copper steadied on Wednesday as a round of global risk aversion abated and focus switched to earnings reports for new light on the global economic recovery, while reports of declining output continued to cushion prices.
LME copper traded at $9,630 at 1011 GMT, unchanged form $9,630 at the close on Tuesday.
The metal used in power and construction hit a record high of $10,190 a tonne in February this year.
"JP Morgan will be reporting and that will be extremely important in determining the sentiment for markets," said analyst Daniel Brebner at Deutsche Bank.
JPMorgan Chase & Co is expected to post an increase in first-quarter profit of more than 50 percent on Wednesday, as the bank weathers a slowdown in trading and fewer borrowers default on credit card loans.
The correlation between equity markets and commodities has tightened as metals have entered a sideways trading range, with an absence of China buying from the spot copper market curbing its advance, analysts said.
"Copper continues to struggle to the upside in the absence of fundamental drivers, instead swinging alongside the broader market and getting its cue elsewhere with relatively anaemic spot demand," said VTB Capital in a note.
The dollar remained under a bit of pressure which was also keeping commodities supported, Brebner added.
A weaker dollar makes commodities less expensive for holders of other currencies.
The prospect of further interest rate rises by the European Central Bank while monetary policy stays loose in the United States and Japan continued to buoy the single currency on Wednesday.
Longer term, falling ore grades and a lack of new large scale mines have crimped the copper supply pipeline, which is also buttressing copper prices, Brebner said.
Global miner Rio Tinto forecast a 10 percent drop in refined copper output for this year to 350,000 tonnes, in its latest production report.
It also said it saw iron ore production roughly meeting market expectations for the full year, despite floods and cyclones denting output.
The Singapore Mercantile Exchange will launch cash-settled gold, silver and copper futures contracts on April 15, the exchange said, which may carve out a new market for speculators seeking arbitrage opportunities.
NICKEL SURPLUS
The International Nickel Study Group (INSG) said it expected the global nickel market to record a 60,000-tonne surplus this year, compared with a deficit of 30,000 tonnes in 2010.
"The current INSG view for 2011 is for a modest stock build up which could grow if projects ramp up faster than estimated in the forecast," Lisbon-based INSG said in a release.
It said world primary nickel output is expected to rise to 1.60 million tonnes this year from 1.44 million tonnes in 2010.
Traders said that demand for the metal most commonly used in stainless steel remains lackluster at the moment with orders weak going into the second quarter. Stocks rose on the LME, the latest data showed.
LME nickel changed hands at $26,585 a tonne compared with $26,700 on Tuesday's close.
LME copper inventories also rose in latest data, by 3,225 tonnes and have now surged by more than 100,000 tonnes from mid-December, taming upside price potential.
Now that fresh quarter fund allocation appears to have run its course, "the realisation is dawning that there is plenty of metal around," a London trader said.
"The copper concentrate market is pretty slack at the moment, the treatment charges are through the roof and there seems to be ample concentrate lying around in China," he said.
"With the stock increases and premiums weak for warrants on the physical side, the LME price has been ahead of the physical market."
Capping gains in battery material lead was a 4,950-tonne rise in inventories in the Malaysian port of Klang.. Lead traded at $2,730 against $2,725.
LME zinc traded at $2,457 a tonne from $2,469 while tin was at $32,500 from $32,550.
Indonesia's refined tin exports in March rose 37.6 percent to 9,051.46 tonnes, compared to 6,576.01 tonnes in the same month a year ago, data from the trade ministry showed today.
LME aluminium was at $2,666 from $2,660.
(Source: http://af.reuters.com/article/investingNews/idAFJOE73D00X20110414?sp=true)
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