RTRS:METALS-Copper ends up as risk-on trade lifts wider market
* Spanish bank rescue plan lifts copper
* Potential China, U.S. stimulus plans supportive
* Euro ends higher in aftermath of ECB rate decision
* Coming up: U.S. weekly jobless claims; Bernanke testimony Thurs.
By Chris Kelly and Susan Thomas
NEW YORK/LONDON, June 6 (Reuters) - London copper prices rose for the first
time in five sessions on Wednesday and U.S. copper futures also rose amid
optimism for a European rescue of Spain's troubled banks that helped spur gains
in other risk asset markets.
Copper rose in tandem with a more than 1-percent rally in U.S. and European
equity markets and a firmer tone in the euro as investor sentiment improved on
news that Germany and European Union officials were urgently exploring ways to
rescue Spain's debt-stricken banks.
The metal was also supported by expectations that China and the United
States, two of the world's largest copper consumers, may consider more action to
bolster their economies if the fragile global recovery falters or Europe's debt
problems worsen.
London Metal Exchange (LME) three-month copper rose $50 to end at
$7,411 a tonne in its first day back from a two-day holiday in the United
Kingdom.
In New York, COMEX copper for July delivery shot up by 9 cents, or
2.7 percent, to settle at $3.3790 per lb, near the upper end of its $3.2950 to
$3.3820 range.
COMEX copper's volume closed in on 77,000 lots in late New York trade, in
line with the 30-day average, according to preliminary Thomson Reuters data.
The day began with a front-page editorial from the official China Securities
Journal, urging Beijing to take more steps to shore up China's economy.
A disappointing move later in the day from the European Central Bank (ECB),
which left both interest rates and the outlook for economic growth unchanged,
seemed to stall the early advance.
"We had a technical rebound this morning but then the market fell a bit due
to Draghi's comments," VTB Capital analyst Andrey Kryuchenkov said of ECB
President Mario Draghi. "Basically he said that the states need to sort out
themselves and implied that the ECB has limited means to resolve the crisis, so
that was a depressing comment."
"Although the economists expected interest rates to remain at 1 percent the
market is always in a wishful thinking (mode); some were hoping the ECB would
cut rates or renew its bond purchase programme so they were disappointed."
In the U.S., the president of the Atlanta Federal Reserve Bank, Dennis
Lockhart, said the U.S. central bank may need to consider additional monetary
easing if a wobbly U.S. economy falters or Europe's troubles generate a broader
financial shock.
Looking ahead, markets will be eyeing a testimony by Federal Reserve
Chairman Ben Bernanke before a congressional committee on Thursday, which could
signal possible policy moves.
"I think there is every expectation out there that the Fed's going to go
dovish and try to say everything that the market wants to hear," said Bart
Melek, head commodity strategist with TD Bank Financial Group. "On that, we're
getting a bit of an uptick."
ALUMINUM
The dismal economic outlook and low aluminum prices prompted Norsk Hydro
to shut its Kurri Kurri smelter in Australia, removing around 170,000
tonnes per annum from the market over the next two years, supporting the price
of the metal.
"Together with the potential for an alumina supply squeeze in China after
refiners there said they would cut output by 1.7 million tonnes in response to
tightening bauxite supply, we may see further pressure on Chinese smelters to
cut back in the medium term," ANZ said in a research note.
In other aluminum-related news, Rio Tinto Alcan said Tuesday it had not
scheduled any meetings to end a six-month lockout of unionized workers at its
438,000-tonne Alma smelter in northern Quebec.
Three-month aluminum ended up $6.5 at $1,979 a tonne.
Metal Prices at 1754 GMT
Metal Last Change Pct Move End 2011 Ytd Pct
move
COMEX Cu 337.10 8.20 +2.49 343.60 -1.89
LME Alum 1979.00 6.50 +0.33 2020.00 -2.03
LME Cu 7410.00 49.00 +0.67 7600.00 -2.50
LME Lead 1907.50 7.50 +0.39 2035.00 -6.27
LME Nickel 16090.00 -10.00 -0.06 18710.00 -14.00
LME Tin 19600.00 205.00 +1.06 19200.00 2.08
LME Zinc 1878.00 7.00 +0.37 1845.00 1.79
SHFE Alu 15905.00 -20.00 -0.13 15845.00 0.38
SHFE Cu* 54080.00 290.00 +0.54 55360.00 -2.31
SHFE Zin 14785.00 110.00 +0.75 14795.00 -0.07
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
