RTRS:METALS-Copper up from 2-mth lows, growth worries cap gains
* Copper gains as euro steadies after Greek budget deal
* China copper imports fall sharply in October, cap gains
* U.S fiscal cliff looms, dents risk appetite
* China issues tender to stockpile aluminium
By Maytaal Angel
LONDON, Nov 12 (Reuters) - Copper rebounded on Monday from a previous
two-month low after Greece's lawmakers approved a pivotal budget reform which
boosted the euro, but gains were capped by concerns about the U.S. fiscal cliff
and waning demand from China.
The dollar index was flat, with the euro holding steady versus the greenback
after the Greek budget approval. However, gains were limited as a meeting of
euro zone finance ministers on Monday was not expected to agree the release of
fresh bailout funds.
Also weighing on copper, weekend data showed a sharp fall off in copper
imports from China - which consumes about 40 percent of the world's copper -
while Japanese growth data pointed to a mild recession in the world's
third-largest economy
In the U.S. meanwhile, the economy is facing a fiscal cliff that could see
nearly $600 billion worth of spending cuts and tax increases begin in early 2013
if Republicans and Democrats fail to agree a last minute budget deal.
Three-month copper on the London Metal Exchange climbed 0.59 percent
to $7,602.25 by 1033 GMT, reversing losses from the previous session when it
closed down more than half a percent.
"The euro strengthened because of Greece, but more cuts just means the
economy goes deeper into recession, perpetuating how many times Greece comes
back with the begging bowl," said Citi analyst David Wilson.
A weaker dollar versus the euro makes metals priced in the U.S. currency
cheaper for European and other non-U.S. investors.
Looking ahead Wilson said: "We see slowing Chinese copper imports over the
next few months, because of the crackdown on collateralised financing (of
copper). At some point this is going to be factored into copper price."
Copper hit its lowest since Aug. 31 on Friday at $7,506 a tonne. Prices have
fallen for the past five weeks, erasing gains made after Europe and the U.S.
retained easy monetary conditions in September.
Helping the metal rebound though, is a series of recent upbeat data from
China suggesting seven straight quarters of slowing growth have ended. On the
other hand, the uncertainty surrounding China's leadership change is tempering
optimism.
COPPER IMPORTS FALL
Also, China's copper import growth slowed sharply to hit a 17-month low in
October, a delayed effect of the negative arbitrage conditions over the summer
caused by higher international prices compared to the domestic market.
Futures-based arbitrage for copper, based on three month LME and ShFe
prices, has turned positive for imports, although including premiums of $40-$60
paid for stock in bonded warehouses, they are not yet in profitable territory, a
Shanghai-based trader said.
Battery material lead fell 0.16 percent to $2,145.5 a tonne, giving
back some of the strong gains seen over the past few weeks even as the physical
market remains tight.
LME data showed the premium for cash lead against the three-month contract
surged to $28.50 a tonne by Friday's close, its highest in more than a year and
up from an $8 discount on Oct. 22.
The market for lead has tightened due in part to thinning scrap supply
brought about by a mild winter in the U.S. and Europe last year that caused
fewer batteries to fail.
Supply tightness has also been exacerbated by big banks and trade houses
pulling metal into LME-monitored warehouses with long backlogs.
Elsewhere, soldering metal tin rose 0.37 percent to $20,375 a tonne,
with data showing the premium for cash tin over the three month price
at $30 a tonne as of Friday, indicating tight nearby supply.
Zinc, used in galvanizing rose 0.42 percent to $1,898 a tonne, with
data showing 60,700 tonnes were booked to leave LME warehouses in Antwerp,
extending the length of the multi-month queue there and making more zinc supply
unavailable.
Aluminium rose 0.61 percent to $1,932.75 a tonne, while
stainless-steel ingredient nickel, the worst performing LME base metal
this year, rose 0.19 percent to $15,980.
Helping aluminium, China's State Reserves Bureau (SRB) issued a tender to
buy 160,000 tonnes of the light metal from local smelters, two sources who
received the tender notice said on Monday.
Metal Prices at 1040 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in
yuan/T
Metal Last Change Pct Move End 2009 Ytd Pct
move
COMEX Cu 344.80 0.25 +0.07 334.65 3.03
LME Alum 0.00 -1921.00 -100.00 2230.00 -100.00
LME Cu 7552.00 -8.00 -0.11 7375.00 2.40
LME Lead 2148.50 -0.50 -0.02 2432.00 -11.66
LME Nickel 15945.00 -5.00 -0.03 18525.00 -13.93
LME Tin 20295.00 -5.00 -0.02 16950.00 19.73
LME Zinc 1892.00 2.00 +0.11 2560.00 -26.09
SHFE Alu 15230.00 -10.00 -0.07 17160.00 -11.25
SHFE Cu* 55640.00 -290.00 -0.52 59900.00 -7.11
SHFE Zin 14820.00 -105.00 -0.70 21195.00 -30.08
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
