RTRS:METALS-Copper at 3-week peak on prospects of EU deal
* Freeport halts output at Grasberg, No. 2 copper mine
* Coming up: U.S. industrial production for Sept at 1415 GMT
* Coming up: Chinese 3Q GDP, industrial output, retail sales
By Melanie Burton
LONDON, Oct 17 (Reuters) - Copper rallied to a three-week
peak on Monday as prospects for a resolution to the euro zone's
debt crisis spurred risk appetite, while supply concerns
gathered momentum due to strikes in Peru and Indonesia.
Three month copper on the London Metal Exchange
traded at $7,610 a tonne at 1032 GMT, up by 1.1 percent from
Friday's close at $7,545 a tonne.
It had hit its highest in three weeks at $7,660 a tonne, a
rebound of more than 15 percent from 2011 trough of $6,635 hit
earlier this month.
"It's a relief rally," said analyst Daniel Briesemann of
Commerzbank.
"It's very difficult to say that troubles in the euro zone
are likely to pass in the next week...(but) if it's not a
recession but a small slowdown, then maybe it's priced in," he
said.
"Better sentiment together with a relatively constrained
supply situation is helping the market," he added.
G20 finance ministers and central bankers said at a meeting
in Paris at the weekend that they expected euro zone leaders to
"decisively address the current challenges through a
comprehensive plan" at a European Union summit on Oct. 23.
Stronger-than-expected earnings from Google on
Friday and expectations of more upbeat results in the
third-quarter earning season also supported risky assets.
Results out on Monday include Citigroup , as well as
Hasbro , IBM Corp and Wells Fargo .
Also likely to help set tone and metals direction this week
is industrial production data out of the U.S. on Monday and
China on Tuesday.
Chinese stockmarkets underperformed their Asian peers on
Monday, which may point to weaker figures being priced in,
Commerzbank's Briesemann added.
Also later this week, U.S. regulators this week will
finalize their toughest crackdown yet on volatile oil and metal
markets, concluding nearly four years of fierce debate over
whether limits on speculative trade can tame prices.
SUPPLY KINKS
Underpinning copper sentiment and helping to provide a floor
for prices, was industrial action at operations run by Freeport
McMoRan Copper & Gold Inc in Indonesia and Peru, said
Steve Hardcastle, head of metals trading at Sucden Financial.
"There's an air of stability around the place the now," he
said.
Freeport McMoRan Copper & Gold Inc halted copper and
gold production on Monday at its giant Grasberg mine in
Indonesia because of security fears and worker blockades, in the
worst supply disruption since a strike began a month ago.
Also, on Friday, a Peruvian union pulled out of talks with
the U.S. miner while members threatened to go on a hunger
strike to press demands for a pay hike.
The roughly 20 million tonne copper market is expected to be
in a 670,000-tonne deficit this year, according to a poll of 24
analysts compiled by Reuters in July.
Across other metals, global miner Rio Tinto
signalled a major retreat from its aluminium business on
Monday, only four years after buying aluminium giant Alcan for
$38 billion. For a breaking views column: Id:nL3E7LH19I
Aluminium was at $2,241 from a last bid of $2,220 on
Friday.
Tin was at $22,000 from $21,800.
"Fundamentally the price should probably be stronger," said
Macquarie in a note.
"Although demand growth has slowed and supply has been
rising, the market remains in a deficit that, relative to market
size, is the largest among the LME traded base metals and belies
the recent sharp sell-off in the tin price."
Zinc , used in galvanizing was at $1,930
from $1,930 on Friday's close.
Battery material lead was at $2,040.25
from $2,026 and nickel was at $18,926 from $18,875.
Metal Prices at 1027 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2009 Ytd Pct
move
COMEX Cu 344.00 3.45 +1.01 334.65 2.79
LME Alum 2215.00 8.00 +0.36 2230.00 -0.67
LME Cu 0.00 -7545.00 -100.00 7375.00 -100.00
LME Lead 0.00 -2026.00 -100.00 2432.00 -100.00
LME Nickel 0.00 -18875.00 -100.00 18525.00 -100.00
LME Tin 21800.00 0.00 +0.00 16950.00 28.61
LME Zinc 0.00 -1930.00 -100.00 2560.00 -100.00
SHFE Alu 16630.00 -65.00 -0.39 17160.00 -3.09
SHFE Cu* 55900.00 -110.00 -0.20 59900.00 -6.68
SHFE Zin 15260.00 -35.00 -0.23 21195.00 -28.00
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
