(Updates prices)
By Jane Lee
KUALA LUMPUR, Jan 9 (Reuters) - Copper fell on Monday,
erasing gains in the previous session, as concerns over slowing
growth in the euro zone strengthened the U.S. dollar, making
commodities priced in the unit more expensive in other
currencies.
Three-month copper on the London Metal Exchange lost
0.7 percent to $7,525 a tonne by 0717 GMT, after an increase of
0.5 percent on Friday.
The most-traded March copper contract on the Shanghai
Futures Exchange fell 0.7 percent to 55,490 yuan
($8,800) a tonne.
"Across the commodity complex, gains were capped because of
dollar strength," said Ong Yiling, an investment analyst at
Phillip Futures in Singapore.
"It's a theory of relativity and markets are seeing that the
disparity between the U.S. and Europe is widening. The euro zone
debt trouble is still hanging over us."
The euro hit a 16-month low versus the dollar on Monday,
hurt by negative news from the euro zone over the weekend, with
the risks of further declines seen in coming months.
Euro zone retail sales fell and economic sentiment worsened
at the end of 2011, pointing to recession in the currency bloc
while in the United States, employment growth accelerated.
Investors are also watching debt sales by Spain and Italy
later this week for signs of market confidence in the nations'
plans to pull out of the euro zone crisis.
Following a year of tumultuous highs and lows, copper prices
are expected to improve from the depressed levels at the end of
2011 and steady in 2012, as the market begins to balance rising
demand by addressing supply shortfalls.
Speculators in copper further reduced bearish bets in the
red metal to the lowest level since the second week of November,
latest data from the U.S. Commodity Futures Trading Commission
showed.
Data from China over the weekend showed banks increasing
their lending in the final month of 2011, raising expectations
that businesses will find it easier to borrow and purchase
commodities.
LME copper is neutral in a range of $7,450
to$7,627.25 a tonne, and an escape will point a direction,
according to Reuters technical analyst Wang Tao.
The metal faces "short-term" resistance at $8,000, according
to Phillip Futures' Ong.
Base metals prices at 0717 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7525.00 -55.00 -0.73 -0.99
SHFE CU FUT MAR2 55490 -410 -0.73 0.23
HG COPPER MAR2 341.35 -2.15 -0.63 -0.65
LME Alum 2058.00 -11.00 -0.53 1.88
SHFE AL FUT MAR2 15945 10 +0.06 0.63
LME Zinc 1860.25 7.25 +0.39 0.83
SHFE ZN FUT MAR2 14740 10 +0.07 -0.37
LME Nickel 18669.00 -31.00 -0.17 -0.22
LME Lead 1967.00 8.00 +0.41 -3.34
SHFE PB FUT 15175.00 -100.00 -0.65 -0.72
LME Tin 19700.00 -150.00 -0.76 2.60
LME/Shanghai arb^ 107
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus
SHFE third month
($1 = 6.3095 Chinese yuan)
