RTRS: METALS-Copper near one-month low as U.S. fiscal talks sour
* Tension rises over stalled U.S. "fiscal cliff" talks
* Data suggest U.S. jobs growth limited
* U.S. Q3 GDP growth revised up to 3.1 percent
By Susan Thomas and Silvia Antonioli
LONDON, Dec 20 (Reuters) - Copper hit its lowest in almost a month on
Thursday, pressured by a deadlock in talks to avert a fiscal crisis and by weak
job data in the United States, but an upward revision of the country's growth
data limited the fall.
In Washington a political deal to narrow the budget deficit is needed to
avoid a package of mandatory spending cuts and tax rises set for January, which
could throw the world's largest economy back into recession.
No progress was made in talks on Wednesday.
"In the past few days there were hopes that the politicians would find a
solution to the dispute, but overnight the talks seem to have deteriorated,"
Commerzbank analyst Daniel Briesemann said.
"So it looks like they won't resolve the issue before the end of the year,
and that's probably weighing on more cyclical commodities today."
The tension was expected to rise later on Thursday when the Republican Party
leadership plans to try to pass a bill of its own in Congress in a move that has
already angered President Barack Obama.
Three-month copper on the London Metal Exchange was at $7,753 by
1500 GMT, down from $7,926 at the close on Wednesday.
It sank to its lowest since Nov. 28 at $7,735 earlier in the session,
shortly after data from the United States suggested job growth remains moderate
in the world's largest economy, clouding the outlook for base metals
demand.
"The jobless claims data was negative, that's a key factor for copper today,
plus there are nerves over the fiscal cliff," VTB Capital analyst Andrey
Kryuchenkov said.
The metal, used in power and construction, was also under pressure from
traders who rely on reading signals from price charts after it fell below the
$8,000 mark.
Copper has dipped below its 30-, 100- and 200-day moving averages, which
have converged around $7,877/$7,878.
An upward revision of U.S. GDP data for the third quarter countered some of
the doubts over the weakness of the U.S. economy but was not convincing enough
to lift copper prices.
Gross domestic product expanded at a 3.1 percent annual rate in the third
quarter, the Commerce Department said in its third estimate on Thursday, up from
the 2.7 percent pace reported last month.
"Sure the GDP number being better holds up some promises of upsides in the
U.S. economy but only once the fiscal cliff negotiations are resolved and that
could be today, tomorrow, who knows," Robin Bhar, an analyst at Societe
Generale, said.
U.S. housing starts data had already fuelled some concerns about the
recovery on Wednesday. Construction is a significant market for copper, with a
little over 400 lb of the metal used to build a typical U.S.
home.
CHINA
Helping to limit losses in copper, China's manufacturing sector expanded in
December, data showed this month. This has been reflected in some copper
purchases by consumers.
China is the world's top copper consumer, accounting for 40 percent of
refined demand last year.
"From late November to early December, downstream users in China built up
stocks. Demand now is okay, but not very strong," said Chunlan Li, a
Beijing-based copper analyst with consultancy CRU.
In other metals, three-month aluminium, was at $2,063 per tonne from
$2,085 at the close on Wednesday.
Daily average primary aluminium output rose slightly last month to 67,600
tonnes from 67,200 in October, International Aluminium Institute data showed on
Thursday.
Three-month tin, was at $23,200 from $23,500, and lead was
at $2,316 f rom $2,337.
Zinc was $2,055 from $2,086 and nickel was $17,442 from
$17,750.
Metal Prices at 1504 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 352.00 -7.45 -2.07 344.75 2.10
LME Alum 2062.00 -23.00 -1.10 2020.00 2.08
LME Cu 7750.50 -175.50 -2.21 7600.00 1.98
LME Lead 2314.00 -23.00 -0.98 2034.00 13.77
LME Nickel 17420.00 -330.00 -1.86 18650.00 -6.60
LME Tin 23100.00 -400.00 -1.70 19200.00 20.31
LME Zinc 2054.75 -31.25 -1.50 1845.00 11.37
SHFE Alu 15250.00 -40.00 -0.26 15845.00 -3.76
SHFE Cu* 56870.00 -780.00 -1.35 55360.00 2.73
SHFE Zin 15375.00 -85.00 -0.55 14795.00 3.92
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
