RTRS:METALS-Copper up on EU hopes but rebound seen as fragile
* IMF denies it is in discussions on Italy rescue plan, but mkts cling to hope
* Belgian bond auction later in session seen key test of sentiment
* Coming up: Chicago Fed Oct midwest manufacturing index at 1230 GMT
LONDON, Nov 28 (Reuters) - Copper rallied on Monday to its highest in a
week amid hopes that eurozone leaders will unveil concrete measures to deal with the
debt crisis, though the metal remained vulnerable ahead of European bond auctions
later in the day.
Copper and other commodities got an early lift from a
weekend media report suggesting the International Monetary Fund
was preparing a rescue plan worth up to 600 billion euros for
Italy. Commodities held on to gains even after the IMF said it was not in discussions
with Italian authorities on a financing plan.
"It is really strange the IMF report has been denied, nevertheless the market
seems to be a little bit more optimistic that there might be some solution even as
politicians have not yet presented a convincing solution for the debt crisis," said
Quantitative Commodity Research analyst Peter Fertig.
Three-month copper on the London Metal Exchange
rose 3 percent to $7,452 a tonne at 1027 GMT versus a close at $7,230 a tonne on
Friday. The red metal, used in power and construction, hit a day high of $7,480 a
tonne, up 3.46 percent.
Investor attention is now focussed on Belgian bond auctions scheduled on Monday,
given the country's benchmark 10-year yield has risen close to the 6 percent level
that prompted Portugal and Ireland to consider seeking bailouts.
Copper could give back some gains if the auction goes badly, though for now
investors fingers are crossed, with euro zone finance ministers expected to clear the
way Tuesday for the zone's 440 billion euro bailout fund to attract cash from private
and public investors.
"I wouldn't say the sentiment is incredibly bullish, it's
just less bearish," said Citigroup analyst David Thurtell.
Also aiding copper was data showing LME stocks, seen as an indicator of demand,
fell 1,950 tonnes to 392,775 tonnes, their lowest since late January. Most of the
outflows were from Singapore, Rotterdam and Bussan.
In industry news, Global miner Rio Tinto said it was worried
about the general softening of prices at a time when it continues to see higher cost
and strong currencies in Australia and Canada.
Copper is down 23 percent this year and on track for its first annual decline
since 2008 as the eurozone debt crisis, along with the weak outlook for the U.S.
economy, dampened investor sentiment towards riskier assets.
In other metals traded, zinc which is used in galvanizing rose 1.57
percent to $1,940 a tonne, battery material lead rose 1.51 percent to
$2,034.25, aluminium rose 1.68 percent to $2,026.50 while stainless-steel
ingredient nickel rose 2.45 percent to $17,365.
Bucking the trend was soldering metal tin which edged up just 0.24
percent to $20,750 a tonne versus a close of $20,700, despite tightness in nearby
supply, with cash tin trading at a premium of $25 a tonne to the three month
benchmark CMSN0-3
Weighing on tin was news that Indonesian producer PT Koba Tin had shipped 400
tonnes of tin ingot to Singapore, breaching a near-two month industry export stoppage
that has been supporting prices.
Metal Prices at 1031 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 337.00 10.00 +3.06 334.65 0.70
LME Alum 2168.00 175.00 +8.78 2230.00 -2.78
LME Cu 7230.00 0.00 +0.00 7375.00 -1.97
LME Lead 2003.00 -1.00 -0.05 2432.00 -17.64
LME Nickel 16950.00 -125.00 -0.73 18525.00 -8.50
LME Tin 20700.00 0.00 +0.00 16950.00 22.12
LME Zinc 1909.00 -1.00 -0.05 2560.00 -25.43
SHFE Alu 15830.00 20.00 +0.13 17160.00 -7.75
SHFE Cu* 55370.00 1780.00 +3.32 59900.00 -7.56
SHFE Zin 15170.00 335.00 +2.26 21195.00 -28.43
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
