RTRS:METALS-Copper hovers near 4-month top on China, supply view
* Follows biggest daily gain in nearly 2 weeks on Monday
* Hopes of firm China demand, supply gap
* Coming Up: Euro zone manufacturing flash PMI; 0858 GMT
(Recasts lead, updates prices)
By Manolo Serapio Jr
SINGAPORE, Jan 24 (Reuters) - London copper futures
edged higher and stayed near four-month highs on Tuesday,
spurred by hopes demand from top copper user China will stay
brisk and that the global market will remain in deficit.
Three-month copper on the London Metal Exchange rose
0.2 percent to $8,385 a tonne by 0716 GMT, after hitting a
session high of $8,402.75, just off the four-month peak of
$8,428.50 reached on Friday.
Copper jumped 1.8 percent on Monday, its sharpest rise since
Jan. 12, helped by the euro's surge to near three-week highs
against the dollar and China's record imports of refined copper
in December.
Trading activity was thin in Asia with many markets,
including China, still shut for the Lunar New Year holiday.
Volume traded on LME Select for the entire base metals complex
was just over 2,000 lots.
Hopes that Chinese demand will stay strong and large stock
withdrawals in London warehouses, along with expectations global
production may continue to be hit by disruptions, have combined
to lift copper by 10 percent so far this year.
Latest data shows that copper stockpiles monitored by the
London Metal Exchange MCU-STOCKS stood at 345,775 tonnes, the
lowest since October 2009.
The world refined copper market was in deficit by 296,000
tonnes during the first 10 months of 2011, versus a deficit of
439,000 tonnes in the same period in 2010, the International
Copper Study Group said.
"Copper remains the tightest of the base metals markets from
a fundamental perspective. Even on modest forecasts of global
demand growth, we expect the market to record a third
consecutive annual deficit in 2012," Macquarie said in a report.
But with copper prices "already trading at levels sufficient
to incentivise the industry to run to the full extent of its
capability", Macquarie said subsequent price rises may only be
spurred by "any anticipated acceleration of demand growth in
China, where physical stocks are thought to remain low".
China's imports of refined copper rose 18.3 percent in
December from the previous month to a record high 406,937
tonnes.
Copper inventories in warehouses overseen by the Shanghai
Futures Exchange CU-STX-SGH rose 9.3 percent to 131,645 tonnes
last week, the highest since April 2011.
Following copper's rally on Monday, Citigroup said it now
sees support for the metal at $8,200 with resistance just above
$8,400.
But some analysts say copper may easily give up gains if the
euro zone debt crisis worsens.
Euro zone finance ministers on Monday rejected as
insufficient an offer made by private bondholders to help
restructure Greece's debts, sending negotiators back to the
drawing board and raising the threat of Greek default.
Base metals prices at 0716 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8385.00 20.00 +0.24 10.33
SHFE CU FUT APR2 60720 160 +0.26 9.68
HG COPPER MAR2 381.00 1.15 +0.30 10.88
LME Alum 2247.50 9.50 +0.42 11.26
SHFE AL FUT APR2 16395 30 +0.18 3.47
LME Zinc 2073.00 14.00 +0.68 12.36
SHFE ZN FUT APR2 15855 195 +1.25 7.16
LME Nickel 20465.00 160.00 +0.79 9.38
LME Lead 2247.25 3.25 +0.14 10.43
SHFE PB FUT 16120.00 120.00 +0.75 5.46
LME Tin 22222.00 72.00 +0.33 15.74
LME/Shanghai arb^ 1410
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
