RTRS:METALS-LME copper comes off 2-month low, capped by US vote
* Copper bounces off 2-month low hit in previous session
* U.S. elections eyed, Greece worries weigh
* Spot copper in China at discount to futures, slow
restocking
(Updates prices; adds quotes, details)
By Carrie Ho
SHANGHAI, Nov 6 (Reuters) - London copper rose on Tuesday,
recovering from a two-month low hit in the previous session,
although gains were capped as uncertainty ahead of the U.S.
elections curbed investors' appetite for riskier assets.
Caution was evident across all financial markets, with oil,
gold and Asian shares trading steady as traders awaited the
results of the tightly fought U.S. presidential election.
"Copper prices have rebounded today after falling over the
past two sessions because there is support at yesterday's trough
from recent signs that the U.S. and Chinese economies are
improving," Great Wall Futures analyst Li Rong said.
Recent manufacturing and jobs data showed the U.S. economy
may be stabilising while China's factory output and investment
may have gathered steam in October as government pro-growth
measures gain traction, a Reuters poll showed.
Three-month copper on the London Metal Exchange rose
0.6 percent to $7,693.50 per tonne by 0703 GMT, after marking
its lowest since Sept. 5 at $7,596 in the previous session.
The most active February copper contract on the Shanghai
Futures Exchange inched up 0.5 percent to close the
session at 56,060 yuan ($9,000) per tonne.
"You can expect that investors will come back to
bargain-hunt and short cover after prices have dipped so much,"
said a Shanghai-based trader. LME and Shanghai copper prices
have shed around 2 percent over the last two sessions and over 7
percent since September.
POLITICAL TRANSITIONS
But U.S. election uncertainty and caution over a leadership
transition in top copper consumer China are expected to keep a
lid on gains.
President Barack Obama and Republican challenger Mitt Romney
were essentially deadlocked on the election eve, polls showed,
raising concerns of a cliff hanger delaying the outcome and
roiling markets, as in the extended presidential battle in 2000.
Analysts say a victory in Tuesday's election for Romney
would pave the way for more deregulation and tax cuts, while a
second term for Obama is likely to bring bigger public
investment in education, research and infrastructure.
Markets also eyed China's once-a-decade leadership
transition event, the 18th Communist Party Congress, which is
scheduled to start on Thursday.
"The change of leadership does have an effect on Chinese
investors as they feel uneasy about making big investments or
restocking before getting a clearer idea of the sort of policies
leaders will be putting in," a Shanghai-based copper buyer said.
WEAK CHINESE DEMAND
Spot copper prices in China were still trading at a discount
to ShFE front-month prices, indicating slow restocking
by the world's top consumer.
Head of Macquarie China Commodities Research Bonnie Liu said
copper orders in China were almost flat in the fourth quarter
from the third quarter, with no big recovery seen yet.
Most of China's copper inventories are in bonded warehouses,
estimated to hold around 750,000 tonnes of the industrial metal
as compared to over 300,000 tonnes at the end of 2011, she
noted, but added that Beijing is expected to stimulate China's
economy through infrastructure investments.
"Infrastructure will still be the key for the central
government to develop for the next couple of years...it also can
offset the slowdown from exports and the construction/property
market," she said.
Renewed worries about Greece, as hopes were dashed for a
fresh funding deal for the country at a Nov. 12 meeting of
ministers, also weighed on prices.
Greek workers begin a 48-hour strike on Tuesday to protest
against a new round of austerity cuts that unions say will
devastate the poor and drive a failing economy to
collapse.
Base metals prices at 0703 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7693.50 43.50 +0.57 1.23
SHFE CU FUT FEB3 56060 280 +0.50 0.77
LME Alum 1915.00 9.00 +0.47 -5.20
SHFE AL FUT JAN3 15300 10 +0.07 -3.41
HG COPPER DEC2 348.95 1.95 +0.56 1.56
LME Zinc 1878.50 10.50 +0.56 1.82
SHFE ZN FUT FEB3 14875 100 +0.68 0.54
LME Nickel 16020.00 120.00 +0.75 -14.38
LME Lead 2143.00 16.50 +0.78 5.31
SHFE PB FUT 15275 120 +0.79 -0.10
LME Tin 20250.00 150.00 +0.75 5.47
LME/Shanghai arb 149
Shanghai and COMEX contracts show most active months
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE
third month
($1 = 6.2454 Chinese yuan)
