RTRS:METALS-Copper rises on consumer spending, strike
* U.S. July consumer spending growth at 5-month highs
* Strike threat looms at Grasberg copper mine
* Coming Up: U.S. consumer confidence 1400 GMT, FOMC minutes 1800
By Susan Thomas
LONDON, Aug 30 (Reuters) - Copper rose on Tuesday, helped by data that
showed U.S. consumers were willing to spend, especially on cars, suggesting
there is some strength in the world's biggest economy.
A threatened strike over a pay dispute at Freeport-McMoRan Copper & Gold's
Grasberg mine in Indonesia, the world's third-biggest copper mine, also
kept copper prices firmly above $9,000 per tonne.
Three-month copper on the London Metal Exchange was $9,136 per tonne
at 1000 GMT, up 0.7 percent from $9,075 at the close on Friday. The exchange was
closed for a public holiday on Monday.
U.S. consumer spending increased 0.8 percent in July on strong demand for
motor vehicles as Japan-related supply restraints faded, a Commerce Department
report showed on Monday. Spending had slipped 0.1 percent in June.
The data was the latest to suggest the economy started the third quarter
with some strength after growth slowed to a near halt in the first half of the
year.
"What we are seeing is some renewed optimism that the world is not entering
another recession," Christin Tuxen, an analyst at Danske Bank, said, also
pointing to comments by Federal Reserve Chairman Ben Bernanke last Friday.
"The Fed seems quite committed, if not to specific measures, then at least
to new stimuli and that is something that is feeding optimism in the base metals
market."
Bernanke opted to keep the door open to further monetary measures,
postponing a decision on more stimulus, giving the central bank more time to
assess the state of the U.S. economy.
His move heightened the focus on upcoming economic data this week, including
the closely watched August U.S. employment report due on Friday, as well as U.S.
ISM manufacturing numbers and China purchasing managers' index for August.
"For sentiment to improve further in the near-term, positive PMI readings
this week from China and the USA will be needed," Credit Suisse said in a
research note.
China's official PMI, due on Thursday, is likely to have picked up a touch
in August from a 28-month low in July, signalling some stabilisation in the vast
manufacturing sector helped by solid domestic demand.
"There is a sense that even though the western countries might struggle for
a few years, the commodities intensive economies are likely to see fairly
healthy growth rates. They'll need both copper and aluminium," Tuxen said.
China is the world's largest consumer of copper, which is used in building
construction, wiring and power cables, accounting for around 40 percent of
global demand.
The higher LME copper price shut the arbitrage window late last week,
discouraging imports of the metal into China. The arbitrage, a lower three-month
LME copper price than the most active Shanghai copper contract price
SCFcv1, opened earlier in August.
Japan's refined copper exports fell 26 percent in July from a year earlier to
33,254 tonnes, down for a tenth straight month, but the pace slowed from June's
drop of 39 percent, Ministry of Finance data showed on Tuesday.
Headline inventories of the metal in LME-monitored warehouses fell by 550
tonnes to 464,375 tonnes as nearly 2,000 tonnes into Rotterdam were more than
offset by outflows primarily from South Korean ports, latest data showed.
Aluminium stocks fell by 6,275 tonnes to 4,642,725 tonnes, mostly out of U.S.
locations.
Three-month aluminium was up 0.9 percent at $2,399.50 per tonne from
$2,378 at the close on Friday.
Tin was at $24,100 from $23,805 , zinc
was $2,279 from $2,246, and lead $2,497 from
$2,485. Nickel was $21,891 from $21,450.
Metal Prices at 1000 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2010 Ytd Pct
move
COMEX Cu 415.00 5.20 +1.27 444.70 -6.68
LME Alum 2375.00 -3.00 -0.13 2470.00 -3.85
LME Cu 8800.00 -275.00 -3.03 9600.00 -8.33
LME Lead 2722.00 237.00 +9.54 2550.00 6.75
LME Nickel 24100.00 2650.00 +12.35 24750.00 -2.63
LME Tin 23805.00 0.00 +0.00 26900.00 -11.51
LME Zinc 2517.00 271.00 +12.07 2454.00 2.57
SHFE Alu 17445.00 75.00 +0.43 16840.00 3.59
SHFE Cu* 68250.00 640.00 +0.95 71850.00 -5.01
SHFE Zin 17315.00 190.00 +1.11 19475.00 -11.09
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Reporting by Susan Thomas; Editing by Alison Birrane)