RTRS:METALS-Copper rises with euro on Greece relief
* EU seals 130-bln euro financing deal with Greece
* LME copper up 1.4 pct, worry on China demand cuts gains
* Coming Up: Chicago Fed National Activity Index, 1330 GMT
(Updates prices, adds details)
By Manolo Serapio Jr
SINGAPORE, Feb 21 (Reuters) - London copper futures
rose more than 1 percent on Tuesday after debt-laden Greece
struck a deal for a second bailout package to avoid a default
next month, fuelling appetite for riskier assets.
The deal involves 130 billion euros ($172 billion) in new
financing for Greece and for Athens to work to cut its debt to
121 percent of GDP by 2020, two EU officials said. The euro
jumped back to positive territory on the news while Asian stocks
cut losses.
Three-month copper on the London Metal Exchange rose
1.4 percent to $8,349.75 a tonne by 0536 GMT, extending Monday's
modest gains, but below its 200-moving day average of $8,398.40.
The Greece deal came just days after China announced its
first bank reserve requirement ratio (RRR) cut this year,
joining global counterparts in easing credit conditions to spur
its economy, which helped copper break a six-day losing streak
on Monday.
But with Greece needing far more work to fix its downtrodden
economy and other euro zone countries also beset by austerity
measures, the positive impact of the deal on financial markets
could soon wear off.
"It's a relief for markets, broadly speaking, but it doesn't
mean that this is the end of the line," said Thomas Lam,
economist at DMG & Partners Securities.
"It's a difficult process, but it's inching in the right
direction."
The agreement on the rescue package, subject to strict
conditions, will help draw a line under months of uncertainty
that has shaken the currency bloc, and avert an imminent Greek
bankruptcy.
The most-traded May copper contract on the Shanghai Futures
Exchange gained 1.1 percent to 59,980 yuan a tonne.
With the Greece burden out of the way, at least for the
meantime, investor focus will likely turn to Chinese demand.
Demand from the world's biggest copper consumer has been
slack, with copper stocks in Shanghai warehouses at their
highest in nearly a decade last week.
Bonnie Liu, commodity analyst at Macquarie Securities in
Shanghai, said she sees a seasonal pickup in Chinese demand
possibly in April, but only expects a modest increase.
"Except for some seasonal factors it doesn't seem to me that
demand is there yet so prices will likely range trade for a
while."
"If the price goes below $8,000 that might be attractive for
the Chinese to come back to the market," said Liu.
Base metals prices at 0536 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8349.75 114.25 +1.39 9.87
SHFE CU FUT MAY2 59980 640 +1.08 8.35
HG COPPER MAR2 378.80 8.00 +2.16 10.24
LME Alum 2200.75 21.75 +1.00 8.95
SHFE AL FUT MAY2 16155 20 +0.12 1.96
LME Zinc 2015.00 33.00 +1.66 9.21
SHFE ZN FUT MAY2 15780 175 +1.12 6.66
LME Nickel 19936.00 186.00 +0.94 6.55
LME Lead 2080.00 29.00 +1.41 2.21
SHFE PB FUT 15805.00 120.00 +0.77 3.40
LME Tin 23950.00 425.00 +1.81 24.74
LME/Shanghai arb^ 1573
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 0.7538 euros)
