(18/04) METALS-Copper ticks up; China policy eyed, technicals point higher

April 18, 2011

Copper prices reversed early
losses on Monday, focusing on a more positive technical outlook,
with some in the market viewing China's reserve ratio hike as a
step closer to the end of the monetary tightening cycle.

Three-month copper on the London Metal Exchange rose
$31.75 to $9,436.75 a tonne by 0700 GMT. Shanghai's most-active
June copper futures contract SCFcv1 rose 210 yuan to 71,040
yuan a tonne, after ending last week down 3.5 percent, its
biggest weekly drop in a month.

Shanghai copper traded at a discount of 1,126 yuan versus
the benchmark LME contract, counting for China's 17 percent VAT.
Technically, copper prices could rebound to $9,500, Reuters
analyst Wang Tao said, based on an Elliott wave analysis of
short-term market behaviour.
Copper may also see pressure after the International Copper
Study Group (ICSG) trimmed its 2011 global copper market deficit
forecast to 377,000 tonnes, about 20,000 tonnes narrower than
its previous forecast in October 2010.