RTRS:METALS-Copper rises on stronger euro; Spain, U.S. data in focus
* Spain in focus as bailout expectations rise
* Pan Pacific offers $85/T 2013 copper premium to China
* Coming up: ECB rate decision at 1145 GMT
By Harpreet Bhal
LONDON, Oct 4 (Reuters) - Copper edged higher on Thursday,
helped by a stronger euro on expectations Spain would seek a
bailout to rescue its economy, although gains were capped by
uncertainty about global growth while trading volumes were low
as China remained on holiday.
Benchmark copper on the London Metal Exchange
(LME)shook off losses from the previous session to rise to
$8,318 a tonne at 0917 GMT, up 0.3 percent from Wednesday's
close of $8,290.
The euro rose against the dollar, with investors' keeping a
close eye on possible financial aid for Spain as the European
Central Bank (ECB) gathers for a rate-setting meeting.
The ECB is expected to hold interest rates to allow time for
new details to emerge on the health of the euro zone economy and
for Spain to ask for aid. A rate decision is due at 1145 GMT
with a news conference at 1230 GMT.
"It (a potential bailout for Spain) removes some uncertainty
in the market. It is a not a question of if but when for Spain
(to ask for a bailout) and that will be seen as a huge relief
for the market," said Robin Bhar, analyst at Societe Generale.
"But the potential upside for copper is pretty limited
whilst there is uncertainty about China's growth and U.S. growth
and with the euro zone in recession, and that is going to keep a
lid on rallies."
Trading volumes were thin as China is still on a public
holiday. China is the world's top consumer for refined copper,
accounting for as much as 40 percent of demand.
Investors are likely to look ahead to non farm payrolls data
from the United States, due on Friday, for indications of a
recovery in the country's key labour market.
Sentiment surrounding the U.S. labour market was boosted in
the previous session after data showed private sector hiring
rose by a better-than-expected number in September.
Activity in the vast services sector also picked up,
suggesting the economy remained on track for modest growth.
"We think the slant of the market after the payroll numbers
on Friday will really be the action one should pay attention to.
For now look at continued back and forth as the market
consolidates terrific gains made since August," RBC Capital said
in a note.
LOWER PREMIUM
In industry news, Pan Pacific Copper Co, Japan's
biggest copper smelter, is offering a term copper premium of $85
per tonne for clients in China for 2013 shipments, down from
$100 in 2012, a source familiar with the matter said.
The lower premiums reflect slowing demand growth in the
world's top consumer of metals.
Uncertainty about the outlook for physical demand continues
to sour sentiment for the metal used in power and construction
as global economic growth struggles.
"Overall we expect Q4 prices to continue to take cues from
the macro rather than the physical market," said James Luke, a
Hong Kong-based commodities analyst at China International
Capital Corporation (CICC).
"Prices will be well supported but I don't expect physical
demand to surprise on the upside and that should limit prices
relative to other more purely investor-driven metals such as
gold."
In other metals, battery material lead rose to
$2,310 a tonne from Wednesday's close of $2,306, while zinc
was at $2,083 from $2,082 at the close on Wednesday.
Nickel climbed to $18,673 from $18,525.
Aluminium rose to $2,107.50, from a last bid of
$2,102.50 on Wednesday, and tin climbed to $22,250 from
a last bid of $22,100.
Metal Prices at 0922 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 379.70 1.10 +0.29 344.75 10.14
LME Alum 2107.25 0.25 +0.01 2020.00 4.32
LME Cu 8313.00 23.00 +0.28 7600.00 9.38
LME Lead 2308.25 2.25 +0.10 2034.00 13.48
LME Nickel 18670.00 145.00 +0.78 18650.00 0.11
LME Tin 22200.00 -95.00 -0.43 19200.00 15.63
LME Zinc 2082.50 0.50 +0.02 1845.00 12.87
SHFE Alu 15760.00 65.00 +0.41 15845.00 -0.54
SHFE Cu* 59770.00 670.00 +1.13 55360.00 7.97
SHFE Zin 15680.00 100.00 +0.64 14795.00 5.98
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
