* Copper stocks in Shanghai fall by about 10,000 tonnes
* Japanese shipments of aluminium products fall 4.8 percent in July y-o-y
* Coming Up: Fed chief Bernanke's speech; 1400 GMT
By Silvia Antonioli
LONDON, Aug 26 (Reuters) - Copper steadied on Friday, with investors
cautious but hopeful that Federal Reserve Chairman Ben Bernanke will show
willingness to support the stalling U.S economy and on concerns a strike at a
copper mine in Indonesia will sap already tight supplies.
A softer dollar against a basket of currencies also lent support.
Three-month copper on the London Metal Exchange was up 0.8 percent
at $9,096 a tonne by 1111 GMT, after closing 1.7 percent higher in the last
session, when it hit $9,075, the highest since Aug. 8. It dosed at $9,030 on
Thursday.
All eyes are on Bernanke's speech at an annual central bank conference in
Jackson Hole, Wyoming, the venue where he last year unveiled a second round of
quantitative easing (QE), which ended in June.
Many investors do not believe he will show willingness to take other,
relatively modest, steps to shore up the recovery.
"People are really hoping for a new round of quantitative easing but now
they are scaling back their expectations," said VTB Capital analyst Andrey
Kryuchenkov.
"Bernanke could indicate that monetary easing is possible but more likely he
will only talk about general instruments to support the economy."
If Bernanke did announce a third round of quantitative easing, metals market
would rise, at least temporarily, analysts said.
"Should we see a positive announcement out of Jackson Hole, we would
speculate the sentiment boost along with a tightening supply situation are that
the seeds being sown for a year end rally in the base metals space," RBC said in
a note.
A planned strike at Freeport McMoran's Grasberg copper mine in Indonesia
reinforced worries over supply tightness, supporting copper prices.
A softer dollar was also underpinning metals prices. A weak U.S.
currency makes dollar-priced commodities more affordable for holders of other
currencies.
COPPER DEMAND
Also supporting copper, deliverable inventories of the metal in warehouses
monitored by the Shanghai Futures Exchange fell 8.7 percent, or almost 10,000
tonnes to 102,258 from last Friday.
"On the physical side demand is gradually recovering," Kryuchenkov said.
"Stocks in Asia are moving down, spot premiums are holding up and the
cash-to-three month is moving towards a backwardation. These are all signs that
demand is there."
The copper contango -- a discount for cash over three-month material --
narrowed to $14.50 from $25.75 on Aug. 3.
Three-month aluminium was $23,372 per tonne, up from $2,361 at the
close on Thursday.
Japanese shipments of aluminium products fell 4.8 percent in July from a
year earlier to 170,916 tonnes, industry data showed on Friday, falling
year-on-year for the second month in a row as the impact from the March
earthquake was still felt.
The country's output of rolled copper product also fell, dropping 4.1
percent in July from a year earlier, its second consecutive year-on-year fall,
due to sluggish demand from auto and chip makers, an industry association said.
Tin was $23,700 from $23,400 while zinc was
$2,242 from $2,228. Lead was $2,455 from $2,401 and
nickel was $21,274 from $20,875.
Metal Prices at 1111 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 410.85 2.95 +0.72 444.70 -7.61
LME Alum 2368.00 7.00 +0.30 2470.00 -4.13
LME Cu 9095.00 65.00 +0.72 9600.00 -5.26
LME Lead 2453.00 52.00 +2.17 2550.00 -3.80
LME Nickel 20825.00 -50.00 -0.24 24750.00 -15.86
LME Tin 23675.00 275.00 +1.18 26900.00 -11.99
LME Zinc 0.00 -2177.50 -100.00 2454.00 -100.00
SHFE Alu 17380.00 60.00 +0.35 16840.00 3.21
SHFE Cu* 67440.00 650.00 +0.97 71850.00 -6.14
SHFE Zin 17090.00 5.00 +0.03 19475.00 -12.25
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
