RTRS:METALS-Copper eases as Europe debt worries weigh
* Copper stocks at LME warehouses fall
* Supply disruptions at copper mines
* COMING UP: U.S. ISM non-manufacturing PMI, June; 1400 GMT
By Marie-Louise Gumuchian
LONDON, July 6 (Reuters) - Copper dipped on Wednesday after Moody's
downgrade of Portugal's credit rating revived investor concerns over the euro
zone's debt woes but supply disruptions at some of the world's top copper mines
are expected to keep a floor under prices.
Three-month copper on the London Metal Exchange traded at $9,512 a
tonne by 0945 GMT from $9,540 a tonne at Tuesday's close. The metal used in
power and construction hit its highest since end-April on Tuesday at $9,565.
Moody's became the first ratings agency to cut Portugal's credit standing to
junk, warning the country may need a second round of rescue funds before it can
return to capital markets.
"The market wasn't expecting that ... People were still focused on Greece
and hopes that gradually the situation was improving there," Nic Brown, head of
commodity research at Natixis said. "It's clearly upset the market a little
bit."
The dollar was up against a basket of currencies.
A stronger dollar makes commodities like metals more expensive for holders
of other currencies.
Traders also said Wednesday's options declaration day was pulling copper
towards $9,500. Traders of calls and puts, the right to buy or sell a contract
at a fixed price later, have to decide whether to exercise their options on the
first Wednesday of each month during early LME trading hours.
Prices were being supported by supply disruptions in Chile and Indonesia. An
unusually severe winter storm has hit operations at Collahuasi, the world's No.
3 copper mine, with more heavy snow, wind and rain expected in Chile's
copper-rich north.
Workers at Codelco's El Teniente copper mine voted to ratify a
company-wide, 24-hour strike for July 11 to protest the restructuring of the
state mine. Union workers at all of Codelco's six copper mines plus a refinery
district are expected to approve the call for strike from union leaders.
Mining operations and production at Freeport-McMoRan Copper & Gold's
Grasberg mine in Indonesia have also been significantly curtailed by the second
day of a seven-day strike by about 8,000 workers, union workers said on Tuesday.
FALLING COPPER STOCKS
Investors will keep an eye on a raft of macroeconomic data and news this
week with U.S. non-farm payrolls out on Friday and the European Central Bank's
rate decision on Thursday.
VTB Capital said it saw support for copper prices at $9,000 while
resistance was at $9,700 a tonne for now. "The market could easily hit the top
of the range should data surprise to the upside and the dollar take more
losses," it said in a note.
Investors were also keeping an eye out for indications of any monetary
policy tightening from top copper consumer China.
Stabilising prices remains the priority for the Chinese government even
though price pressures have been contained, Premier Wen Jiabao said in comments
published on Tuesday.
Copper inventories at LME warehouses continued their downtrend, latest data
showed. They last fell 1,225 tonnes to 461,275 tonnes. <0#LME-STOCKS>
In other industry news, Australia's no. 2 nickel miner Minara Resources
said it has placed production on standby a week after the acid plant at
its ore processing facility was shut down, but added that it held enough
inventory to cover sales commitments.
Zambia's Munali nickel mine has resumed underground operations that were
suspended in June due to ventilation problems, a company official said.
Nickel traded at $23,399 a tonne from $23,300, supported by
declining inventories, which fell to their lowest since April 2009 at 105,480
tonnes. MNI-STOCKS
Tin was at $26,800 from $26,250, after touching its highest in just
over a month while zinc , used in galvanizing was at $2,394 from $2,411 a
tonne.
Battery material lead was at $2,690 from $2,695 a tonne. It earlier
hit $2,701, its highest since mid-April. Aluminium was at $2,560 from
$2,576 a tonne, having earlier hit a three-week high of $2,582.50.
Metal Prices at 0948 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2010 Ytd Pct
move
COMEX Cu 432.90 -1.30 -0.30 444.70 -2.65
LME Alum 2565.00 -11.00 -0.43 2470.00 3.85
LME Cu 9530.00 -10.00 -0.10 9600.00 -0.73
LME Lead 2700.00 5.00 +0.19 2550.00 5.88
LME Nickel 23300.00 0.00 +0.00 24750.00 -5.86
LME Tin 26345.00 95.00 +0.36 26900.00 -2.06
LME Zinc 2400.00 -11.00 -0.46 2454.00 -2.20
SHFE Alu 17405.00 105.00 +0.61 16840.00 3.36
SHFE Cu* 70770.00 440.00 +0.63 71850.00 -1.50
SHFE Zin 18175.00 95.00 +0.53 19475.00 -6.68
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
