RTRS:METALS-Copper up on Greek debt hopes, demand prospects
* Demand hopes strong following Fed rate announcement
* EU's Rehn says Greek debt talks have nearly concluded
* Coming Up: U.S. fourth-quarter GDP; 1330 GMT
By Maytaal Angel
LONDON, Jan 27 (Reuters) - Copper hit a four-month high on Friday and
was on track for a third straight week of gains as investors bet Greek debt
talks would soon conclude and demand prospects remained bright following the
U.S. Federal Reserve's pledge to keep rates low.
Benchmark three-month copper on the London Metal Exchange rose 0.68
percent to $8,648 a tonne by 1118 GMT from $8,590 at the close, having earlier
reached a high of $8,679.50. The metal is headed for a 5 percent increase this
week and a 13 percent jump this year, following a 21 percent drop in 2011.
Federal Reserve Chairman Ben Bernanke said this week the U.S. central bank
was ready to offer the economy additional stimulus after it announced it was
likely to keep interest rates near zero until at least late 2014.
"We still think the market will reach a peak into April. It's never happened
in history that you have the Federal Reserve and the European Central Bank
competing over who is pouring more liquidity into the market," said Gianclaudio
Torlizzi, an analyst at T-Commodity.
He added, however: "There's a question mark over what the Chinese will do
from next Monday. The Chinese buy copper from around $7,000 to $7,500 a tonne,
when they see an 8 in front of copper they don't buy."
The Shanghai Futures Exchange is closed this week for the Lunar New Year
holiday, and investors meanwhile were awaiting U.S. data on fourth-quarter
economic growth due later in the day for further clues on demand prospects.
Sluggish demand from China, as well as a recovery in supplies and an
uncertain economic outlook for the global economy, are set to weigh on copper
this year, a Reuters poll showed.
IMMINENT
In the wider markets, world stocks were steady near a 5-1/2 month high as
investors anticipated an imminent conclusion to Greek debt talks, while lower
Spanish bond yields and a fall in Italy's six-month borrowing costs also
supported the euro.
A strong euro makes dollar-priced metals cheaper for European investors.
EU Economic and Monetary Affairs Commissioner Olli Rehn said talks with
private creditors on restructuring Greek debt were "very close" to closing,
though investors were growing jittery that Portugal may require another
bailout.
On the supply side, meanwhile, the latest readings point to continued
tightness in copper. LME inventories fell by 2,450 tonnes to 335,425, their
lowest since September 2009.
"The outlook for industrial metals is now definitely improving as the
combination of low interest rates and stabilizing economic growth is supportive
for more cyclical sectors," said Credit Suisse in a note.
But it voiced concerns over China, the world's top copper consumer: "Next
week's focus is likely to shift to China. We should get more indications whether
Chinese inventories rose just as a result of restocking ahead of the Chinese New
Year or because of a slowdown in demand."
In industry news, Anglo American posted a rise in quarterly output
for its key commodities, with iron ore up and copper boosted by a ramped-up Los
Bronces mine in Chile.
In other metals traded, soldering metal tin rose 1.23 percent to
$24,300 a tonne from $24,005, while zinc, used in galvanizing fell 0.50
percent to $2,194 a tonne from $2,205.
Battery material lead fell 0.32 percent to $2,317.50 a tonne versus
$2,325, while aluminium rose 0.26 percent to $2,282 from $2,276, and
stainless-steel ingredient nickel rose 0.12 percent to $21,625 a tonne
from $21,600.
Metal Prices at 1123 GMT
Metal Last Change Pct Move End 2009 Ytd Pct
move
LME Alum 2276.00 24.00 +1.07 2230.00 2.06
LME Cu 8590.00 0.00 +0.00 7375.00 16.47
LME Lead 2325.00 0.00 +0.00 2432.00 -4.40
LME Nickel 21575.00 -25.00 -0.12 18525.00 16.46
LME Tin 24000.00 -5.00 -0.02 16950.00 41.59
LME Zinc 2205.00 0.00 +0.00 2560.00 -13.87
SHFE Alu 16395.00 30.00 +0.18 17160.00 -4.46
SHFE Cu* 60720.00 160.00 +0.26 59900.00 1.37
SHFE Zin 15855.00 195.00 +1.25 21195.00 -25.19
** 1st contract month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
