RTRS:METALS-Copper eases as China buyers out for the count
* Markets watching developments in Greece for direction
* LME-ShFE copper spreads unchanged, flag weak China demand
* Coming up: Efsf's Regling to deliver speech, London at
1210 GMT
(Updates prices, adds detail)
By Melanie Burton
SHANGHAI, Feb 7 (Reuters) - London copper slipped on
Tuesday on sluggish post-holiday purchases from top consumer
China, but prices were supported by hopes that Greece's bailout
deal would succeed and help the euro zone avoid an economic
downturn.
Three-month copper on the London Metal Exchange fell
0.48 percent to $8,459 a tonne by 0702 GMT, clawing back some
losses from the previous session when it slipped by almost one
percent. Copper hit a one week-high of $8,598.50 on Friday and
rose for the fourth consecutive week last week.
The most-traded April copper contract on the Shanghai
Futures Exchange (ShFE) edged down 0.83 percent to
60,030 yuan a tonne.
"It's all Greek related right now, there's nothing
fundamentally to move the markets in terms of Chinese demand,"
U.S.-based analyst Ed Meir of INTL-FC Stone said.
"Markets will discount some sort of agreement and the firmer
tone will probably carry on until we have the next big shoe drop
-- the Chinese trade data for January could be
significant ."
Greek leaders face crunch talks on Tuesday to agree on
unpopular reforms to secure a 130-billion-euro ($170 billion)
bailout and avert a chaotic debt default which could threaten
its future in the euro zone.
The leaders are caught between their increasingly
frustrated partners in the European Union for failing to pass
the reforms quickly and workers who went on strike on Tuesday to
protest against the austerity measures.
The euro was edging lower against the dollar ahead
of the talks, adding headwinds to metals, because a stronger
greenback raises the cost of commodities for holders of other
currencies.
On the demand side, Chinese trade data is due later this
week, with markets keeping a close eye on copper imports which
hit a record high in December, when arbitrage and financing
opportunities burnished the metal's appeal.
China is the world's largest copper consumer, and monthly
import figures have been climbing since June 2011.
But imports are expected to be weaker in January in part due
to Lunar New Year holidays and as slower manufacturing weakened
demand. How much weaker will be a key point watched by the
market, given signs of sluggish post-holiday consumption.
"It's all very dull. The spreads are still rubbish, the arb
is well and truly closed. Premiums are soft," a trader at a
Western bank based in Singapore said.
The trader was talking about the ShFE copper forward curve,
where front month prices remain at a steep discount to third
month prices, and the price differential between LME and ShFE
copper, which makes imports unprofitable at the moment.
Analysts also said a lack of consumer interest, in addition
to fresh worries over European debt, could fuel a correction in
prices which many believe have outrun fundamentals for now.
"The latest data from the Shanghai Futures Exchange showed
that inventories have continued to increase rapidly and physical
premiums are easing as well," Credit Suisse Private Banking said
in a note.
"Sentiment could turn out to be fairly shaky in the
days ahead."
PRICES
Base metals prices at 0702 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8459.00 -41.00 -0.48 11.30
SHFE CU FUT APR2 60030 -500 -0.83 8.44
HG COPPER MAR2 384.35 -2.10 -0.54 11.86
LME Alum 2217.00 -5.00 -0.23 9.75
SHFE AL FUT APR2 16145 -70 -0.43 1.89
LME Zinc 2121.75 -9.25 -0.43 15.00
SHFE ZN FUT APR2 16010 -185 -1.14 8.21
LME Nickel 21510.00 -185.00 -0.85 14.97
LME Lead 2181.25 0.25 +0.01 7.19
SHFE PB FUT 16050.00 -195.00 -1.20 5.00
LME Tin 24300.00 -200.00 -0.82 26.56
LME/Shanghai arb^ 2385
Shanghai and COMEX contracts show most active months
