RTRS:METALS-Copper rises on Obama win, but more losses seen
* Focus may shift to Greek vote, fiscal cliff
* Analysts see dollar firming on safe haven flows
* Lead top gainer on good short term fundamentals
(Adds quotes, details; previous SHANGHAI)
By Eric Onstad
LONDON, Nov 7 (Reuters) - Copper climbed on Wednesday after U.S. President
Barack Obama was re-elected, but it may be vulnerable to fresh losses as
investors switch focus to a key Greek austerity vote and the U.S. "fiscal cliff"
of tax hikes and spending cuts.
The Obama victory fuelled hopes Washington will continue with economic
stimulus measures, pushing down the greenback and making metals priced in
dollars cheaper for holders of other currencies.
Three-month copper on the London Metal Exchange gained as much as
1.4 percent after the U.S. election results emerged, but had pared gains to 0.5
percent at $7,740 per tonne by 1100 GMT.
Wednesday's gains could be short-lived and copper could extend its
downtrend, which has seen 8 percent of losses since touching a peak of $8,422 on
Sept. 19, said analyst Daniel Briesemann at Commerzbank in Frankfurt.
"In copper there are risks of some setbacks in the very short term. Have a
look at Greece, there's huge political risk in the euro zone, this should weigh
on the euro and lead to a higher dollar," Briesemann said.
Greece's ruling coalition hopes to overcome its own divisions and defy
protesters to push through later on Wednesday an austerity package needed to
secure aid and avert bankruptcy.
Analysts also said the dollar could soon resume its uptrend if safe-haven
flows are prompted by growing worries over the looming U.S. "fiscal cliff" that
risks pushing the economy into deep recession.
Speculators were expected to keep weighing on copper, which could revisit
two-month lows around $7,600 touched on Monday and may even slide as low as
$7,500, Briesemann said.
"But this could provide a floor for further price increases in the medium to
long term," he added.
LEAD SEEN STRONG IN SHORT TERM
On the Shanghai Futures Exchange, the most active February copper contract
rose 1 percent to end the session at 56,600 yuan ($9,100) a tonne.
Investor focus is now turning to a once-in-a-decade leadership transition in
top copper consumer China due to be kicked off at a Communist Party congress
that starts on Thursday. Investors are hoping the new government will announce
new measures to spur growth.
"Just as in the case of the U.S. elections, investors will be glad when the
party congress is finally out of the way," said a Shanghai trader.
Chinese downstream copper demand remains weak, with spot copper still
trading at a discount to Shanghai front-month futures prices.
Traders said physical premiums, the price paid on top of LME-based prices
for copper imports into China, have been hovering at around $40-50, around $10
cheaper than a month ago and $80-90 lower than a year ago.
Most other LME metals were stronger than copper, with three-month lead
the top gainer, climbing 1.4 percent to $2,195 per tonne.
Briesemann said the supply-demand fundamentals looked positive for lead in
the short term amid hopes for stronger battery demand in China and low
availability of LME inventories.
LME stocks MPBSTX-TOTAL are down 17 percent since February and 42 percent
are cancelled and not available to the market.
Lead spreads remained tight, with the premium of cash over three months
CMPB0-3rising to $12.50 by Tuesday's close from $10 on Monday and a discount
of $6 on Oct. 23.
Zinc rose 1.2 percent to $1,921 per tonne after stocks data
MZNSTX-TOTAL showed 88,250 tonnes of fresh cancellations, increasing total
cancelled material not available to consumers to 39 percent of the total.
Aluminium gained 1.3 percent to $1,944.50 a tonne, tin added
0.9 percent to $20,800 and nickel rose 1.1 percent to $16,253.
Metal Prices at 1103 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 351.25 0.65 +0.19 344.75 1.89
LME Alum 1943.50 37.50 +1.97 2020.00 -3.79
LME Cu 7740.00 40.00 +0.52 7600.00 1.84
LME Lead 2194.25 29.25 +1.35 2034.00 7.88
LME Nickel 16243.00 168.00 +1.05 18650.00 -12.91
LME Tin 20775.00 150.00 +0.73 19200.00 8.20
LME Zinc 1920.25 21.25 +1.12 1845.00 4.08
SHFE Alu 15335.00 35.00 +0.23 15845.00 -3.22
SHFE Cu* 56560.00 510.00 +0.91 55360.00 2.17
SHFE Zin 14925.00 95.00 +0.64 14795.00 0.88
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
