RTRS:METALS-Copper drops as caution prevails; China imports fall
* China Jan copper imports drop 18.7 pct on holiday
* LME copper off 0.9 pct, but eyeing 5th weekly gain
* Coming Up: Federal Reserve's Bernanke speaks; 1730 GMT
(Updates prices, adds details)
By Manolo Serapio Jr
SINGAPORE, Feb 10 (Reuters) - London copper futures
fell nearly 1 percent on Friday, after rising to five-month
highs in the previous session, as euro zone finance ministers
pushed for more measures from Greece before it provides its
second EU bailout in two years.
Investors largely shrugged off data showing copper imports
by top consumer China fell 18.7 percent in January, with many
factories shut during the week-long Lunar New Year holiday.
The drop was largely within market expectations although
some analysts thought the import volume, at more than 400,000
tonnes, suggested Chinese demand remains strong.
Three-month copper on the London Metal Exchange
dropped 0.9 percent to $8,682.25 a tonne by 0708 GMT, after
peaking at $8,765 on Thursday, its loftiest since Sept. 16.
Copper is still up 1.4 percent for the week, heading for its
fifth straight week of gains, thanks to Thursday's surge
courtesy of the Greek deal.
The most-traded May copper contract on the Shanghai Futures
Exchange closed up 0.3 percent at 61,560 yuan a tonne,
chasing LME's gains in the previous session.
Greek political leaders said they had clinched a deal on
economic reforms needed to secure a second EU bailout, but euro
zone finance ministers demanded more steps and a parliamentary
seal of approval before providing the aid.
Jean-Claude Juncker, who chairs the Eurogroup, set three
conditions, saying the Greek parliament must ratify the package
when it meets on Sunday and a further 325 million euros of
spending reductions needed to be identified by next Wednesday,
after which euro zone finance ministers would meet again.
"There's still a bit of uncertainty surrounding that Greek
deal. The general tone is supportive, but there are still some
hurdles to overcome," said Stefan Graber, analyst at Credit
Suisse.
"The latest rally looks like it could run out of steam in
the very near term, but generally the economic backdrop looks
friendlier now compared to only a few months ago."
A mending U.S. job market has also been lending support to
copper prices, with the number of Americans signing up for
unemployment benefits falling unexpectedly last week.
FAIRLY STRONG
China's imports of unwrought copper and semi-finished copper
products fell to 413,964 tonnes in January after a record
508,942 tonnes in December, customs data showed.
"A fall was on the cards, this was slightly less than I had
expected given the base effect from the accelerated unloadings
in December and the Lunar New Year in January," said Nick
Trevethan, senior commodities strategist at Australia and New
Zealand Bank.
"It's quite a positive number and I suspect we will see
imports at or above this number in February."
Other analysts agree the January import number was fairly
strong.
"If you strip out the Lunar New Year holiday and look at it
from a weekly basis, average weekly imports in January were
still up nearly 9 percent compared to December," said Judy Zhu,
analyst at Standard Chartered in Shanghai.
With LME prices outpacing gains in Shanghai and China's
copper stockpiles rising, traders said there may be no strong
need for the Chinese to step up imports.
But Graber at Credit Suisse said a relatively robust Chinese
economy should help support copper to trade around $8,500 over
the next three months.
"Our outlook for the year is still constructive and we look
for prices to reach $9,200 in 12 months," he said.
In other news, the CME Group cut trading margins for
copper by 13 percent to $6,750 per contract, and also slashed
margins for other products including crude oil, Brent, gold,
silver and platinum.
Base metals prices at 0708 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8682.25 -77.75 -0.89 14.24
SHFE CU FUT MAY2 61560 210 +0.34 11.20
HG COPPER MAR2 394.95 -2.90 -0.73 14.94
LME Alum 2280.00 -7.00 -0.31 12.87
SHFE AL FUT MAY2 16325 40 +0.25 3.03
LME Zinc 2139.00 -21.00 -0.97 15.93
SHFE ZN FUT APR2 16130 -15 -0.09 9.02
LME Nickel 21500.00 -40.00 -0.19 14.91
LME Lead 2211.75 -10.25 -0.46 8.69
SHFE PB FUT 16070.00 -10.00 -0.06 5.14
LME Tin 25250.00 -150.00 -0.59 31.51
LME/Shanghai arb^ 2658
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third
month
