RTRS:METALS-Copper drops for 2nd day as market eyes Fed
* Investors fear Fed will hint at stimulus withdrawal
* LME aluminium stocks hit new record for second day running
* Coming up: U.S. housing starts, inflation data at 1230GMT
By Maytaal Angel
LONDON, June 18 (Reuters) - Copper dipped for a second day
on Tuesday as investors waited for Federal Reserve Chairman Ben
Bernanke to clarify the U.S. central bank's plans for its
monetary stimulus programme at a two-day meeting starting later
in the session.
Also a drag was news that China's home price rises slowed
for a second straight month in May from the previous month, in a
sign that Beijing's attempts to bring stability to a frothy
property market are having some effect.
China is the world's top consumer of copper, a metal used
extensively in house-building.
Benchmark three-month copper on the London Metal Exchange
had dropped 0.77 percent to $7,027.50 a tonne by 0920
GMT. Copper posted its steepest weekly decline since mid-April
last week, though it has been mostly range-bound between $6,800
a tonne and $7,400 a tonne for the last two months.
"Expectations the Fed might discuss early tapering of
quantitative easing are putting downward pressure on prices, but
fundamentally the market is directionless, demand is not growing
strongly and supply is picking up," said Citi analyst David
Wilson.
"Supply losses so far, including Grasberg and Bingham Canyon
are still below recent trends," he added.
The Fed's bond-buying programme, has underpinned global
markets broadly, but recent comments by chairman Ben Bernanke
that he might slow the $85 billion monthly bond purchases if the
U.S. economy improves has unnerved investors.
Elsewhere, news that Indonesia's government may decide this
week on whether to allow Freeport McMoRan Copper and Gold Inc
to resume open-pit mining at Grasberg, also dragged on
copper.
Grasberg is the world's second largest copper mine. It has
been shut since May 15, a day after a training area in a tunnel
caved in killing 28 workers. That disruption, plus others in
India and the United States had been helping underpin copper.
Still, daily LME stocks data showed the copper market is
well supplied, with stocks currently up 2,675 tonnes at 632,150
tonnes, their highest level in a decade.
In other metals, three-month aluminium fell 0.37
percent to $1,837.75 a tonne, having hit a low of $1,836 a tonne
earlier, near its weakest point since mid-May.
The aluminium sector, burdened by overproduction, was jolted
after data showed an inflow of 68,725 tonnes of stocks into warehouses, which sent the total to a new
record of 5.348 million tonnes.
Metal Prices at 0934 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2012 Ytd Pct
move
COMEX Cu 3.17 -0.02 -0.78 365.25 -99.13
LME Alum 1837.00 -7.50 -0.41 2073.00 -11.38
LME Cu 7032.75 -49.25 -0.70 7931.00 -11.33
LME Lead 2091.25 -17.25 -0.82 2330.00 -10.25
LME Nickel 14113.00 -177.00 -1.24 17060.00 -17.27
LME Tin 20231.00 -169.00 -0.83 23400.00 -13.54
LME Zinc 1852.50 -5.50 -0.30 2080.00 -10.94
SHFE Alu 14500.00 -195.00 -1.33 15435.00 -6.06
SHFE Cu* 51220.00 -680.00 -1.31 57690.00 -11.22
SHFE Zin 14515.00 -60.00 -0.41 15625.00 -7.10
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
