RTRS:METALS-Copper down on dlr rise; Europe deal euphoria fades
* Copper down 2.8 pct on LME, down 1.7 pct on ShFE
* Japan intervenes; dlr spikes against yen
* Coming Up: Eurozone inflation, flash yy, Oct; 0900 GMT
(Updates prices, adds quotes, details)
By Carrie Ho
SHANGHAI, Oct 31 (Reuters) - London copper fell below $8,000
on Monday on a firmer dollar and waning hopes for a speedy
resolution of Europe's debt crisis, but the metal is on track
for its biggest monthly rise since last December.
Continued supply disruptions at the world's second largest
copper mine, Grasberg in Indonesia, and steady spot demand in
China are expected to limit losses.
Three-month copper on the London Metal Exchange fell
2.8 percent to $7,950 a tonne by 0701 GMT, after edging up 0.4
percent in the previous session. It is on track to end the month
up 13.3 percent in the biggest monthly rise since December 2010.
"The euro zone crisis is still a concern, but copper is
mostly feeling the pressure from the dollar's strong rise today.
This is offsetting the support from steady spot demand by
Chinese consumers," said Great Wall Futures analyst Li Rong.
The dollar spiked to a three-month high against the yen on
Monday after Japan intervened in the currency markets for the
third time this year to stem the yen's rise.
The euro zone crisis also weighed on investor sentiment. The
head of Europe's 440 billion euro bailout fund played down hopes
of a quick deal with China to throw its support behind efforts
to resolve the bloc's debt crisis but said he expected Beijing
to continue to buy bonds issued by the fund.
Italy's borrowing costs jumped to record levels on Friday,
underlining its vulnerability at the heart of the debt crisis
and scepticism about whether the struggling government of Prime
Minister Silvio Berlusconi can deliver vital reforms.
The most-active January copper contract on the Shanghai
Futures Exchange SCFc3 slipped 1.7 percent to 58,230 yuan
($9,157.68) per tonne, after jumping 2.1 percent on Friday. It
is on track to post a rise of 6.3 percent, the biggest monthly
gain since December.
Whether copper can sustain October's stellar monthly spike
in November will depend on how confident Chinese consumers feel
about stocking up on large inventories, CIFCO Futures analyst
Zhou Jie said.
"Investors are taking a wait-and-see attitude ahead of the
slew of data this week. There wasn't particularly good news out
of the euro zone this weekend, nor evidence of the anticipated
monetary loosening in China yet," Zhou added.
"People are also waiting to see if there will be any policy
changes with the personnel changes to top financial regulators
here."
China named new officials to three top financial regulatory
posts on Saturday, the official Xinhua news agency said, the
first big step in a comprehensive leadership change that will
culminate when its top political leaders retire.
Sluggish income growth led U.S. households to cut back on
saving in September to raise their spending, showing the
economy's recovery remains fragile.
Japanese factory output fell in September for the first time
since the devastating March earthquake, a sign the economy's
recovery from the disaster is tailing off in the face of slowing
global growth, the strong yen and Europe's lingering debt woes.
In industry news, workers at the world's third-largest
copper deposit, Chile's Collahuasi mine, ended a partial strike
begun early on Saturday after reaching an agreement with
management over bonus payments.
But at Freeport McMoRan Copper & Gold's Grasberg
mine, talks with a union representing striking workers are
deadlocked after a week of negotiations. The mine recently
declared force majeure on copper concentrate
sales.
Base metals prices at 0701 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7950.00 -225.00 -2.75 -17.19
SHFE CU FUT JAN2 58230 -1020 -1.72 -18.96
LME Alum 2220.00 -22.00 -0.98 -10.12
SHFE AL FUT JAN2 16380 -110 -0.67 -2.73
HG COPPER DEC1 360.40 -10.20 -2.75 -18.82
LME Zinc 1940.50 -39.50 -1.99 -20.93
SHFE ZN FUT JAN2 15335 -85 -0.55 -21.26
LME Nickel 19481.00 -219.00 -1.11 -21.29
LME Lead 2014.00 -76.00 -3.64 -21.02
SHFE PB FUT 15345 -90 -0.58 -16.38
LME Tin 21960.00 -90.00 -0.41 -18.36
LME/Shanghai arb 864
Shanghai and COMEX contracts show most active months
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE
third month
($1 = 6.359 Chinese Yuan)
