* Moody's cuts Spain's ratings by two notches
* Mine strikes in Indonesia, Peru hit copper supply
* Coming Up: U.S. CPI for September; 1230 GMT
By Marie-Louise Gumuchian and Alessandra Prentice
LONDON, Oct 19 (Reuters) - Copper fell for a third day on Wednesday after
Moody's cut Spain's sovereign ratings, adding to uncertainty over the euro
zone's lingering debt crisis and economic growth.
Strikes at two Freeport-McMoran Copper & Gold Inc. mines lent little
support.
Three-month copper on the London Metal Exchange (LME) fell to
$7,354 a tonne by 0909 GMT from Tuesday's close of $7,449. The metal used in
power and construction fell in the previous session after top consumer China's
economic growth data came in a touch lower than expected.
"I think there is a bit of concern about demand from China. This week we saw
relatively weak GDP numbers and of course copper is the most China-sensitive
base metal," Danske Bank analyst Arne Lohmann Rasmussen said.
"At the moment the market's trading on global themes, global risk appetite.
Maybe we are moving into slightly calmer waters when we can start focusing on
more specific issues, but this week it is about the European debt crisis and
what is going to happen at the summit."
The euro trimmed some earlier gains after European officials denied an
agreement to boost the euro zone bailout fund had been reached, dimming the
prospect of a breakthrough at this weekend's EU summit.
Senior EU officials said no agreement had been reached on increasing the
size of the fund, dismissing a report in Britain's Guardian newspaper that said
France and Germany had reached such a deal.
A downgrade of Spain's debt rating by Moody's ratings agency also weighed on
the euro as it served as another reminder to European leaders that they must
make rapid progress on solving their debt problems.
"... Uncertainty over Greece's bailout and the lack of clear
agreement on crisis management mechanics under the EFSF (the stability and
rescue fund) are deterring riskier trades for the moment," VTB Capital said in a
note.
Investors will watch out for data from the United States, the world's
largest economy, due later on Wednesday, including the September Consumer Price
Index and housing starts and permits.
STRIKES AT MINES
Copper inventories in LME warehouses rose 250 tonnes to 452,175 tonnes,
latest data showed. Levels are about a third higher since December.
Aluminium stocks fell 2,725 tonnes to 4,571,625 tonnes.
News that Freeport-McMoRan has threatened to close its strike-hit Grasberg
mine in Indonesia, the world's second largest, could provide a floor for prices.
The company's Cerro Verde mine in Peru has also been plagued by a labour
dispute. Talks between management and union leaders are scheduled for Thursday
in what would be a final bid to end a 20-day-old strike.
"Production disruptions at large copper operations in Peru and Indonesia
have extended, while the loss of output continues to rise. This keeps the
physical copper market tightly supplied," Credit Suisse said in a note.
"While fundamentals speak in favour of firmer prices, lacking technical
momentum and the uncertain macro environment continue to flag risks for a
short-term retracement."
Among other metals, aluminium traded at $2,207 from $2,208 a tonne
at Tuesday's close.
The United Arab Emirates (UAE) plans to make possibly the largest-ever
investments in Indonesia's industrial sector by pumping $9.5 billion into
aluminium smelter projects in Kalimantan, Indonesia's ambassador to the UAE
said.
Battery material lead was at $1,915 from $1,925 a tonne, having
earlier hit a two-week low at $1,900.25 a tonne.
Nickel traded at $19,000 from $19,150 per tonne. Australian nickel
miner Panoramic Resources PAN.AX said on Wednesday it has reached an agreement
with BHP Billiton BHP.AX BLT.L to increase its tonnage of nickel shipments to
BHP for processing under a tolling arrangement.
Tin traded at $21,300 from $21,345 a tonne while zinc was at
$1,852 from $1,882 a tonne.
Metal Prices at 0911 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 336.00 0.20 +0.06 444.70 -24.44
LME Alum 2207.50 -0.50 -0.02 2470.00 -10.63
LME Cu 7360.00 -89.00 -1.19 9600.00 -23.33
LME Lead 1915.25 -9.75 -0.51 2550.00 -24.89
LME Nickel 19001.00 -149.00 -0.78 24750.00 -23.23
LME Tin 21250.00 -95.00 -0.45 26900.00 -21.00
LME Zinc 1854.00 -28.00 -1.49 2454.00 -24.45
SHFE Alu 16385.00 30.00 +0.18 16840.00 -2.70
SHFE Cu* 53890.00 210.00 +0.39 71850.00 -25.00
SHFE Zin 14590.00 75.00 +0.52 19475.00 -25.08
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
