RTRS:METALS-Copper steadies on weak dollar ahead of ECB meeting
* London copper steady, Shanghai ticks up
* Near-term direction dollar-driven; eyes on China trade-
* Coming Up: ECB rate decision; 1145 GMT
(Updates prices, adds quotes and details)
By Nick Trevethan
SINGAPORE, June 9 (Reuters) - London copper steadied on
Thursday after the previous session's 1 percent loss, while
Shanghai rose 0.3 percent, supported by a weaker dollar ahead of
a European Central Bank rate decision.
Three-month copper on the London Metal Exchange rose
$9.75, or 0.1 percent, to $9,054.25 a tonne by 0354 GMT.
"There is not much life or excitement left in copper. Trade
recently has been about jobbing in ranges. I don't like to talk
about summer doldrums, but that's exactly where we are stuck," a
trader in Singapore said.
"Copper is capped much above $9,200 with downside limited to
$8,900 in the absence of anything new. We may get fresh
direction after the Chinese trade numbers Friday, until then, we
are likely hostage to currency moves."
China's export growth is expected to moderate in May, but
the monthly trade surplus in May widened slightly from April as
the volume of exports continue to outstrip imports, a Reuters
poll showed. [ID:nL3E7H21IU]
The dollar fell 0.3 percent against a basket of currencies
to $1,4619, but was off a one-month low hit earlier in
the week.
The single currency has been thwarted by solid resistance
around $1.4700, but any signal of an imminent interest rate hike
from the ECB could give the currency a fillip.
The most active contract on the Shanghai Futures Exchange
SCFcv1, August, rose 0.3 percent to 67,690 yuan per tonne.
The price gap between the two markets narrowed to 940 yuan
from above 1,100 yuan on Wednesday.
Zinc fell $13 to $2,280, while Shanghai futures
SZNc3 rose half a percent to 17,445 yuan.
But zinc prices in China, down by more than 10 percent this
year and the weakest performer of all metals traded on Shanghai
and London, may fall further between June to August as smelters
sell stocks and cut output on lukewarm demand, reducing imports
of concentrate. [ID:nL3E7H80G1]
Smelters were keen to sell stocks at cash zinc prices above
17,000 yuan ($2,623) per tonne, industry sources said, adding
most end users did not want to build stocks because access to
credit remained tight.
Markets were worried by the state of the U.S. economy after
gloomy assessments by Fed officials, including chairman Ben
Bernanke, and talk that U.S. lawmakers may force a default in
order to get the White House to cut spending.
Ratings agency Fitch said it would downgrade the U.S. issuer
rating to "restricted default" and lower all U.S. Treasury
securities to the junk level of "B-plus" if the government
misses some coupon payments on its bonds on Aug. 15.
Investors are also looking out for U.S. trade and weekly
jobless numbers later on Thursday, but wholesale inventories may
attract more attention. Friday will see China trade data and was
expected to set the tone in markets next week.
Japan's gross domestic product shrank 0.9 percent in
January-March from the previous quarter, revised Cabinet Office
data showed on Thursday, unchanged from the preliminary figure,
while corporate capital spending posted a bigger drop than
initially estimated in the wake of the March earthquake and
tsunami. [ID:nL3E7H804H]
A slew of recent data has suggested that the worst of the
shocks to production and business confidence caused by the March
disaster is already past as manufacturers make progress in
restoring production facilities and mending supply chains.
Base metals prices at 0354 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 9054.75 9.75 +0.11 -5.68
SHFE CU FUT AUG1 67690 190 +0.28 -5.79
LME Alum 2672.50 4.50 +0.17 8.20
SHFE AL FUT AUG1 17215 70 +0.41 2.23
HG COPPER JUL1 410.10 -3.95 -0.18 -7.62
LME Zinc 2280.00 -13.00 -0.57 -7.09
SHFE ZN FUT AUG1 17445 90 +0.52 -10.42
LME Nickel 22700.00 -5.00 -0.02 -8.28
LME Lead 2565.00 -12.00 -0.47 0.59
SHFE PB FUT SEP1 17050 30 +0.18 -7.08
LME Tin 25700.00 5.00 +0.02 -4.46
LME/Shanghai arb 943
Shanghai and COMEX contracts show most active months
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
