RTRS:METALS-London copper snaps 6 days of losses, China data weighs
* China Feb HSBC flash PMI eases from two-year high
* China January copper imports fall 27.51 percent from last year
* Coming up: U.S. Dallas Fed manufacturing index; 1530 GMT
By Maytaal Angel
LONDON, Feb 25 (Reuters) - Copper edged higher on Monday after a six-day
losing streak, helped by a weaker dollar, although slower growth of
manufacturing activity in top consumer China, where post-holiday buying has yet
to emerge, kept a cap on gains.
China's HSBC flash purchasing managers' index (PMI) for February slipped to
a four-month low of 50.4 from January's final reading of 52.3. The flash PMI
still indicated a fourth consecutive month of expansion.
In addition, trade data showed copper imports into China, which consumes
about 40 percent of the world's copper, reached just 243,174 tonnes in January,
down 27.51 percent from a year ago.
Copper remained in positive territory, however, as traders saw fair value in
the price following last week's sharp correction, and as a weaker dollar made
dollar-priced metals cheaper for non-U.S. investors.
Three-month copper on the London Metal Exchange had risen 0.49
percent to $7,844 a tonne by 0945 GMT, after posting a weekly loss of nearly 5
percent last week, its sharpest since mid-December, 2011.
The most-traded copper contract on the Shanghai Futures Exchange
dropped to a two-month low of 57,090 yuan earlier.
"The pullback we've seen is a realignment of prices to where fundamentals
are but we are moving into a period where demand should start to pick up. A lot
of factories in China are still closed. Some will start opening this week," said
Barclays Capital analyst Gayle Berry.
She added, however, that the market balance this year was a small surplus so
any upside that could come over the next month from stronger demand would be
capped by that better supply.
Having pushed copper to a four-month high earlier this year, investors are
now growing nervous again over euro zone debt pending an election in Italy, and
about U.S. monetary policy and budget woes.
Testimony on Tuesday from U.S. Fed Chairman Ben Bernanke may offer investors
clues about when the Fed intends to rein in its ultra-loose monetary policy, but
they still have to contend with the looming fiscal cliff.
In a replay of tensions seen at the end of last year, the world's top
economy faces automatic spending cuts in most government programmes on March 1
if Washington can't come up with a budget deal.
HOPES STILL PINNED ON CHINA
Traders expect physical purchases to pick up from this week as China's
manufacturing sector returns to work after the Lunar New Year break. However,
the seasonal upturn in demand may not necessarily push prices much higher.
"Copper has lost its appeal as one of the most important commodities in
China's urbanisation process, as the government no longer sees property
development as the core of urbanisation," said Zhu Bin, an analyst at Nanhua
Futures in the eastern Chinese city of Hangzhou.
Zhu expected copper to return to $7,500, last November's low.
Shanghai's spot copper traded at an average discount of 140 yuan to London
prices, even though the period after the Lunar New Year holiday is typically a
busy season for the copper market.
Supporting sentiment, BlackRock Inc. has won approval from the U.S.
securities regulator to list and trade its copper exchange-traded fund. This
suggests extra demand for physical copper.
In other metals traded, aluminium fell 0.72 percent to $2,033.25 a
tonne, having dropped to its lowest since mid-January earlier at $2,029.25 a
tonne under pressure from increasing output in China and continued technical
selling.
Soldering metal tin rose 0.41 percent to $23,200 a tonne, zinc
, used in galvanizing fell 0.31 percent to $2,081.25 a tonne, battery
material lead was flat at $2,304 a tonne, while stainless-steel
ingredient nickel fell 0.66 percent to $16,835 a tonne.
Metal Prices at 0944 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 354.45 1.15 +0.33 334.65 5.92
LME Alum 2048.00 -55.00 -2.62 2230.00 -8.16
LME Cu 7800.00 -5.00 -0.06 7375.00 5.76
LME Lead 2303.00 -1.00 -0.04 2432.00 -5.30
LME Nickel 16975.00 35.00 +0.21 18525.00 -8.37
LME Tin 23105.00 0.00 +0.00 16950.00 36.31
LME Zinc 2088.00 0.00 +0.00 2560.00 -18.44
SHFE Alu 14840.00 -110.00 -0.74 17160.00 -13.52
SHFE Cu* 57280.00 -340.00 -0.59 59900.00 -4.37
SHFE Zin 15550.00 -145.00 -0.92 21195.00 -26.63
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
