* S&P cuts Italy's ratings by one notch
* Technicals-LME copper to drop more to $8,190/T
* COMING UP: FOMC meeting on spurring U.S. growth on Tuesday, Wednesday
By Marie-Louise Gumuchian
LONDON, Sept 20 (Reuters) - Copper picked itself up on Tuesday from
nine-month lows hit in the previous session but concerns the global economic
slowdown will crimp demand for the red metal continued to weigh on sentiment.
Other than euro zone worries, investors were bracing for a two-day meeting
of the U.S. Federal Reserve, with an eye on what policymakers will do to ignite
the faltering U.S. economy.
Three-month copper on the London Metal Exchange (LME) rose to $8,408
a tonne by 0858 GMT from Monday's close of $8,364 a tonne.
The metal used in power and construction tumbled more than 3 percent in the
previous session to hit its lowest level since Nov. 30.
"It's Europe, Europe and more Europe," Natixis analyst Nic Brown said. "It's
a messy situation in Europe and until we get some sort of clarity on it, the
market will continue to be concerned."
The euro pared early losses, but stayed near a seven-month low versus the
dollar as a ratings downgrade of Italy's sovereign debt fuelled concerns that
stronger euro zone countries are caught up in the debt crisis.
Europe has come under increasing global pressure to resolve a crisis that
has seen numerous ratings downgrades and financial rescues for Greece, Portugal
and Ireland. Analysts said the crisis will have to be addressed by policymakers
starting with the U.S. Fed meeting on Tuesday and Wednesday and the G20 and
IMF/World Bank meetings this week.
In other macroeconomic news that may affect metals via currencies, investors
will also keep an eye out for U.S. housing starts/building permits data for
August, which is due later in the day.
European shares rose as traders cited short covering after falls in the
previous session.
"... As long as the macroeconomic environment continues to darken and
sentiment indicators fall, metal prices are likely to remain under pressure,"
Commerzbank said in a note. "Further quantitative easing of U.S. monetary
policy, which could be announced by the US Federal Reserve tomorrow, will
probably only lend support in the near term."
MINE STRIKES
More than a thousand workers have returned to Freeport McMoRan Copper &
Gold's strike-hit Indonesia mine, the company said on Monday, leading
the union to say some production has restarted at the world's third-biggest
copper mine.
Workers at Peru's Cerro Verde mine, which yields 2 percent of the world's
copper, agreed to end an indefinite strike they began last week, but may down
tools again on Sept. 27, a union leader said Monday.
"A partial end to a strike at Freeport McMoran's Grasberg copper and gold
mine in Indonesia could also remove some of the support from copper, although
the union said an agreement still has not been met," ANZ said in a note.
"Sentiment has turned mostly bearish for this market."
Copper stocks at LME warehouses rose 2,200 tonnes to 466,925 tonnes, latest
data showed. Levels are about a third higher than in December 2010.
Lead stocks at LME warehouses, which have been rising since mid-August, hit
their highest in more than 16 years as they jumped 15,250 tonnes to 345,425
tonnes.
Battery material lead traded at $2,314 from $2,301 a tonne. Zinc
, used in galvanizing, traded at $2,111 from $2,100 a tonne.
Nickel traded at $21,276 a tonne from $21,000. Tin was at
$22,998 from $22,710 a tonne while aluminium traded at $2,345 from
$2,340 a tonne.
Metal Prices at 0902 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 379.60 2.35 +0.62 444.70 -14.64
LME Alum 2343.25 3.25 +0.14 2470.00 -5.13
LME Cu 8417.75 53.75 +0.64 9600.00 -12.32
LME Lead 2313.75 12.75 +0.55 2550.00 -9.26
LME Nickel 21284.00 284.00 +1.35 24750.00 -14.00
LME Tin 22841.00 131.00 +0.58 26900.00 -15.09
LME Zinc 2110.00 10.00 +0.48 2454.00 -14.02
SHFE Alu 17055.00 95.00 +0.56 16840.00 1.28
SHFE Cu* 62960.00 -410.00 -0.65 71850.00 -12.37
SHFE Zin 16380.00 95.00 +0.58 19475.00 -15.89
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
