RTRS:METALS-Copper up on euro rebound; seasonal slowdown eyed
* Traders say European consumers have bought summer needs
* Shanghai copper stocks drop by 9.4 percent or 16,325 on
week
* U.S., Germany markets closed on Monday
By Melanie Burton
LONDON, May 25 (Reuters) - Copper was up half a percent on
Friday, boosted by a euro rebound against the dollar and
bargain-hunting after it hit 4.5-month lows this week, but
analysts said that a seasonal slowdown may mean prices could
fall again before summer.
LME copper traded at $7,641.50 a tonne at 1003 GMT
up 0.4 percent from a $7,610 close on Thursday. Prices hit the
lowest since early January at $7,503 this week and were set to
close little changed.
A euro rebound from near two year lows helped ease pressure
on the complex, ahead of a long weekend, and in the absence of
fresh developments over a potential Greece departure from the
euro zone, analyst Robin Bhar of Societe Generale said.
"There's the currency factor and it's a long holiday
weekend in the U.S. and Germany so obviously players are
covering any exposed short positions, plus there's the usual
concerns that we're not going to get any clarity until the Greek
elections," he said.
Worries about the fate of Greece's euro membership remain in
focus after an opinion poll found the anti-bailout leftist party
SYRIZA maintaining its lead ahead of the June 17 election.
"As for copper demand, European consumers are pretty well
covered, and we're heading into a seasonal slowdown. So it does
beg the question, will prices find it difficult staying at these
levels by mid to end June it could be a struggle," he added.
Top consumer China's appetite for metals tends to be
strongest March to May, while European industry and to a lesser
extent that in the U.S., will start to shutter from next month
for the summer holidays.
"European consumers have done all their spot buying and
we're approaching summer - there won't be much to come in and
support prices," a London trader said.
Parts of Europe including Germany and Switzerland, as well
as the U.S will be shut for Whit Monday or Memorial holidays on
Monday.
This week's rout in commodity markets has pushed prices of
aluminium, zinc and nickel down near year to date lows, where
many high-cost producers are starting to suffer, although the
pain threshold may have to increase before widespread closures
help balance markets.
The global copper market for refined copper was in a
110,000 tonne deficit in February versus a 46,000 tonne deficit
in February 2011, the International Copper Study Group (ICSG)
said late Thursday.
CHINA COPPER
Tightly held inventories of copper in China underpinned
prices, as owners feel able to sit on their inventories to wait
for a price recovery, said ANZ in a note.
"We think a cautious approach about the near-term prospects
for the copper market is justified on the basis of sour
sentiment in China and Europe, but concerns about Chinese
inventories are probably a little over done," it said.
"Bonded stocks in Shanghai would appear to be tightly held
and not subject to large-scale liquidation on price falls. So
while elevated copper stockpiles still pose a risk, it may not
be as great a threat as they first appear."
ANZ estimates Shanghai bonded stocks at 650,000 tonnes or
above.
Copper inventories in warehouses monitored by the Shanghai
Futures Exchange fell 9.4 percent or 16,325 tonnes from last
Friday, to 157,489 tonnes, the latest data
showed.
Tin was at $19,825 from $19,970 while zinc,
used in galvanizing was at $1,894.25 f rom $1,886 o n Thursday's
close.
China is likely to boost imports of zinc in the fourth
quarter of the year after Beijing said it would speed up
infrastructure investment, market players said, helping support
prices for the base metal.
Battery material lead was at $1952.50 from $1,955
and aluminium was at $2,020.25 from $2,015. N ickel
was at $17,052 from $17,075.
Metal Prices at 1003 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in
yuan/T
Metal Last Change Pct Move End 2011 Ytd Pct
move
COMEX Cu 345.90 2.95 +0.86 344.75 0.33
LME Alum 2020.25 5.25 +0.26 2020.00 0.01
LME Cu 7641.50 31.50 +0.41 7600.00 0.55
LME Lead 1952.50 -2.50 -0.13 2034.00 -4.01
LME Nickel 17052.00 -23.00 -0.13 18650.00 -8.57
LME Tin 19825.00 -145.00 -0.73 19200.00 3.26
LME Zinc 1894.25 8.25 +0.44 1845.00 2.67
SHFE Alu 16020.00 60.00 +0.38 15845.00 1.10
SHFE Cu* 55610.00 240.00 +0.43 55360.00 0.45
SHFE Zin 14765.00 40.00 +0.27 14795.00 -0.20
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
