* LME copper headed for strongest performance in 22 weeks
* LME copper may revisit 2-mth highs, trend
intact-technicals
* Weekly Shanghai copper stocks seen down 2,000 tonnes
* Coming Up: Euro zone bank stress test results; 1600 GMT
By Manolo Serapio Jr.
SINGAPORE, July 23 (Reuters) - Shanghai copper raced to its
highest level in nearly two months on Friday, chasing sharp
gains in London in the previous session ahead of stress test
results on European banks due later in the day.
London copper eased as investors locked in some gains after
lifting the metal to two-month peaks on Thursday, but is still
up nearly 8 percent on the week, its strongest weekly
performance since mid-February.
The euro zone bank stress tests, aimed at determining which
lenders are healthy and which need to raise new capital, are
expected to show generally positive results for Greece, Italy
and Ireland and a few failures in Portugal and Spain.
[ID:nLDE66J0GP]
For more stories on the stress tests, click:
[ID:nLDE6601T6]
"Some are cautious about what the tests will reveal and
hopefully it will not reignite concerns about sovereign debt
otherwise all this optimism towards economic recovery gets
thrown out the window," said Jonathan Barratt, managing
director at Commodity Broking Services.
Three-month copper on the London Metal Exchange CMCU3
eased 0.5 percent to $6,975 a tonne at 0309 GMT.
LME copper rose as high as $7,050 on Thursday, its loftiest
since May 14, on fund buying and technical factors. At current
prices, the metal is up 7.6 percent on the week, its biggest
since a 9.1 percent climb for the week ending Feb. 19.
Technical charts suggest LME copper could hit $7,050 again
on Friday, after a shallow correction, part of an aggressive
trend towards $7,511, said Reuters market analyst Wang Tao.
[TECH/C-MET]
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For a 24-hour LME copper technical outlook, click:
here
For Shanghai copper, click:
here
For LME aluminium, click:
here
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Shanghai's benchmark third month copper SCFc3 rallied
1,220 yuan, or 2.3 percent, to 55,150 yuan a tonne. The
contract peaked at 55,460 yuan, its highest since May 31.
Optimism about the global economic recovery, spurred by
some U.S. economic housing data and mostly upbeat corporate
earnings, had helped copper trim year-to-date losses to
single-digits from about 13 percent at the start of July, and
Barratt said the bullish trend could persist.
"Purchasing managers who require copper are actually
building their inventories as a result of the optimism
continuing," he said, citing the consistent drop in global
copper stocks.
LME copper inventories stand at 416,525 tonnes, down 25
percent from levels in mid-February when stocks have mostly
dropped since.
Weekly copper inventories in Shanghai are expected to fall
when data is released later on Friday, following a rise of
nearly 2,800 tonnes last week, traders said.
"We heard inventory may decrease by 2,000 tonnes.
Consumption is good and physical copper is selling well," said
a metals trader in Shanghai.
Chinese Premier Wen Jiabao said on Thursday that China, the
world's top copper consumer, will "improve" policy measures to
stimulate domestic consumption in the second half of 2010 while
trying to balance growth and inflationary pressures.
[ID:nTOE66L07U]
World refined copper consumption exceeded production by
67,000 tonnes between January and April this year, against a
surplus of 74,000 tonnes in the same period a year ago, the
International Copper Study Group said in its latest monthly
bulletin. [ID:nLDE66K1NI]
