RTRS:METALS- Copper gains on Greek debt talks hope, stronger euro
* Euro up vs dollar, expectations Greece will reach debt
deal
* Copper holds above 200 day moving average
* COMING UP: U.S. Chicago PMI for Jan at 1445 GMT
By Harpreet Bhal
LONDON, Jan 31 (Reuters) - Copper prices rose on
Tuesday, lifted by a stronger euro on hopes Greece would reach
agreement with its creditors to avoid a messy default, with
prices on track to post their biggest monthly gain in three
months.
Benchmark copper on the London Metal Exchange (LME)
rose 0.7 percent at 0957 GMT, to $8,490.25 a tonne, from a close
of $8,429 on Monday.
Greek Prime Minister Lucas Papademos said negotiators had
made "significant progress" on talks for a debt swap deal
between the government and private bond holders, with the aim of
having a definitive agreement by the end of this week.
The metal used in power and construction is headed for its
biggest gain in three months, up 11 percent so far in January.
"Generally the market isn't feeling as bearish as it was at
the end of last year. If you look at some of the data coming
through... it has not been as bad and the market isn't as
pessimistic as it was before," said Gayle Berry, analyst at
Barcap.
"That's not to say that the problems in Europe have gone
away but there is a realisation that the situation is beginning
to stabilise."
Hopes of a positive outcome out of Greece's debt talks
helped the euro push higher against the dollar. A weak dollar
makes commodities priced in the U.S. unit cheaper for holders of
other currencies.
Sentiment was also helped by an agreement between European
leaders of strict new measures on sovereign budget discipline,
aimed at preventing a repeat of the massive debt accumulation in
some euro zone countries
"With European concerns in focus, economic data took a back
seat... Commodities expected to be choppy this week with
risk-on/risk-off sentiment dominating trades," ANZ analyst said
in a note.
Highlighting some concerns about the demand outlook for base
metals, JPMorgan downgraded its 2012 price forecasts for the
complex saying industrial metals lack the demand spark needed to
ignite prices due to a stuttering global economy.
DECLINING COPPER STOCKS
Large stock withdrawals in LME-monitored warehouses helped
support copper, with the latest data showing inventories
monitored by the LME dropped by 2,300 tonnes to
330,825 tonnes, its lowest since September 2009.
"It is partly reflective of domestic U.S. consumption. Some
of the economic data and the corporate results (from the U.S.)
all point to a market where consumption is actually beginning to
grow again," Berry said.
On the technical front, copper held above its 200 day moving
average, a level which it broke late last week, in a bullish
price signal for the metal.
In northern Chile, workers of a union at Teck Resources
Ltd's TCKb.TO mid-sized Quebrada Blanca copper mine are poised
to strike after labor contract talks with the mining company
broke down, a union leader said on Monday.
Chile's copper output jumped in December from a year earlier
but registered a drop of 3.2 percent in 2011 from the prior year
as falling ore grades, labor woes and weather problems hammered
the world's top producer, the government said on Monday.
Aluminium climbed to $2,297.50 a tonne from a close
of $2,279 a tonne on Monday.
Zinc, used in galvanising, rose to $2,144.75 from a
close of $2,124, while tin climbed to $24,200 from
$23,975.
Battery material lead rose to $2,296.50 from $2,265
and stainless steel ingredient nickel was at $21,400
from $21,305.
"Our feeling is that the nickel price now looks to have
neared a peak as Chinese import demand eases and the risks of a
correction in the short run are growing, despite a non-Chinese
demand recovery," Macquarie analysts said in a note.
Metal Prices at 0958 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 386.30 3.65 +0.95 444.70 -13.13
LME Alum 2298.25 19.25 +0.84 2470.00 -6.95
LME Cu 8492.25 63.25 +0.75 9600.00 -11.54
LME Lead 2296.25 31.25 +1.38 2550.00 -9.95
LME Nickel 21385.00 80.00 +0.38 24750.00 -13.60
LME Tin 24125.00 150.00 +0.63 26900.00 -10.32
LME Zinc 2143.25 19.25 +0.91 2454.00 -12.66
SHFE Alu 16305.00 30.00 +0.18 16840.00 -3.18
SHFE Cu* 60620.00 300.00 +0.50 71850.00 -15.63
SHFE Zin 16065.00 125.00 +0.78 19475.00 -17.51
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
