* Poor U.S. data on Tuesday clouds macro economic outlook
* Zinc gains on short-covering
* COMING UP: U.S. new home sales data for May at 1400 GMT
(Updates prices and comments)
By Humeyra Pamuk
LONDON, June 23 (Reuters) - Copper was steady on Wednesday
as the dollar fell but looked vulnerable as unexpectedly poor
U.S. housing data in the previous session revived concerns about
the strength of global economic recovery.
Traders expected a sideways session in the absence of fresh
fundamental news and as the market looked for direction after
the initial euphoria over changes to China's currency policy
faded and technical charts pointed to a consolidation.
Copper CMCU3 for three months delivery on the London Metal
Exchange was at $6,610 a tonne in the open outcry trade,
unchanged from the close on Tuesday. In electronic trade, it was
edging down to $6,598 a tonne by 1154 GMT.
"The dollar is a bit weaker and gold is up," said RBC
Capital Markets trader Randy North, citing it as the reason why
copper is in positive territory. "There's some short covering
going on in zinc, pushing prices higher," he said.
Zinc CMZN3, used to galvanise steel, gained nearly 2
percent to $1,822.50 a tonne, before trimming some of its gains.
The euro held steady but remained vulnerable as a recent risk
rally appeared to have run its course and on concerns about the
euro zone banking system. [FRX/]
Copper, used extensively in construction, struggled to add
gains as an unexpected fall in the sales of existing U.S. homes
in May clouded the outlook on the global economy.
"Yesterday's U.S. data was rather poor," an LME trader on
the floor said. "It didn't give particularly good news about the
economy," he said.
Investors will be watching new home sales data from U.S. due
at 1400 GMT and will also monitor what the Federal Open Market
Committee will say on economic outlook after a two-day meeting
ends on Wednesday. [ID:nFEDAHEAD]
"The more pressing issues are things like the housing data
in the U.S. yesterday," said Will Adams, analyst at
Basemetals.com. "If we start seeing slightly disappointing data
in the U.S. plus austerity measures in Europe, the direction for
metals could be downside," he said.
LME copper may consolidate further with the price still
trapped between $6,470 and $6,729.75 per tonne and looking for
direction, said Reuters market analyst Wang Tao. [TECH/C-MET]
Some traders said the liquidity was slightly lower than
usual as the World Cup in South Africa grabbed some market
attention. [ID:nTOPCUP]
Aluminium CMAL3 reversed earlier gains and was last down
$1 at $1,948 a tonne, while its inventories saw a rise of 6,325
tonnes, bringing the total to 4.46 million tonnes, around
200,000 tonnes away from a record high struck in January.
The fact that the bulk of the material being tied up into
financing deals is making the nearby market tight, despite high
inventories.
The need to finance the pile of metal could boost to plans
to launch exchange traded funds (ETF), an executive at the
world's largest aluminium producer said.
"There is still plenty of risk capital around to finance
metal ... It's one of the reasons why the ETFs are becoming more
attractive," Greg Wittbecker, director of material management
with Alcoa (AA.N) told Reuters. [ID:nN22700708]
Battery material lead CMPB3 was at $1,810 a tonne, versus
$1,828 a tonne, while tin CMSN3 was at $17,900 a tonne from
$18,150. Nickel CMNI3 dropped $150 to $19,500 a tonne.
Metal Prices at 1209 GMT
Metal Prices at 1212 GMT
Metal Last Change Pct Move End 2009 Ytd Pct
move
COMEX Cu 297.70 -1.50 -0.50 334.65 -11.04
LME Alum 1945.00 -4.00 -0.21 2230.00 -12.78
LME Cu 6600.00 -10.00 -0.15 7375.00 -10.51
LME Lead 1814.00 -14.00 -0.77 2432.00 -25.41
LME Nickel 19550.00 -100.00 -0.51 18525.00 5.53
LME Tin 17750.00 -400.00 -2.20 16950.00 4.72
LME Zinc 1820.00 27.00 +1.51 2560.00 -28.91
SHFE Alu 14820.00 45.00 +0.30 17160.00 -13.64
SHFE Cu* 53130.00 290.00 +0.55 59900.00 -11.30
SHFE Zin 15050.00 240.00 +1.62 21195.00 -28.99
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Additional reporting by Manolo Serapio Jr. in MANILA,
Editing by Alison Birrane)
