* Spain gets 100 bln-euro package for its banks
* China's copper imports post surprise rise in May
* Nickel bucks trend, falls 0.4 percent
By Maytaal Angel
LONDON, June 11 (Reuters) - Copper rallied on Monday after Spain secured a
$125 billion bailout package for its banks and economic data from China was not
as bad as expected, though doubts over whether bailouts can stem Europe's debt
crisis kept gains in check.
Euro zone finance ministers agreed to lend Spain up to 100 billion euros
($125 billion) for its bank rescue fund in a bid to reassure investors and
prevent a bank run.
Three-month copper on the London Metal Exchange rose nearly 3
percent to a session high of $7,506.75 a tonne, rebounding from a near six-month
low of $7,233.25 on Friday.
It traded up 1.51 percent in official midday rings at $7,405 a tonne from
$7,295 at the close on Friday.
The relief may be short-lived, however. Greek elections on
Sunday could put Athens on a path to leaving the euro, which would then renew
market pressure on Spain and Italy, which is also facing scrutiny over its
public finances.
"The Spanish bailout takes short-term risk out of the market, but it doesn't
do much to address the underlying issues and we now have to wait for the Greek
elections," said Credit Suisse analyst Tom Kendall.
Investors also took comfort from data showing China's May copper imports
climbed nearly 12 percent from April, an indication that demand could be
stronger in the near term following the recent price slump.
The data was a mixed bag, however, because it also showed China's inflation,
industrial output and retail sales all flagged in May for a second straight
month, which helped explain China's surprise rate cut last week.
"The Chinese data over the weekend weren't as bad as some were fearing, but
it's a market across commodities where the rallies we are seeing are more
short-covering than improving fundamentals," Kendall said.
AN OPENING TO IMPORT
A physical trader in Shanghai said an improved LME-ShFE arbitrage in May
gave long-term contract buyers and those using copper for financing an opening
to import.
"Copper import losses fell to just around $140 a tonne at some point in May.
The level was not ideal, but better than the $500-700 losses in the previous
months," the trader said.
Data also showed production of refined copper in China fell 1.4 percent from
a month earlier to a three-month low in May, with some smelters taking the
chance to carry out maintenance as consumption remained sluggish.
Though output is expected to pick up in June, China's increased copper
imports, its better-than-forecast exports and its easier monetary policy should
reduce worries about slow demand in the world's top copper consumer.
Elsewhere, LME nickel bucked the broad-based rally, trading down
0.29 percent at $16,900 a tonne in midday rings, after also going against the
trend on Friday. It rose 2 percent while all other metals fell on Friday after
falling below $16,000 on Wednesday, its cheapest level since December 2009.
Looking forward, analysts said weak global demand for stainless steel will
keep pressuring nickel prices. But in the short term, they see some slight
support from dwindling Chinese port stock levels due to lower import appetite
and recent supply disruptions of nickel pig iron from Indonesia.
"I am bearish on nickel over the longer term, but there can be a temporary
lift to prices as soon as there are signs that Chinese port stocks are falling.
However, we are likely to see the effects of this supply-side boost only in a
few weeks' time," Shanghai Metals Market analyst Amy Chen said.
Tin traded up at $19,720 a tonne in rings from $19,700, zinc
traded up at $1,885.50 from $1,868, lead traded up at $1,906 from $1,902
and aluminium traded down slightly at $1,982 from $1,985.
Metal Prices at 1209 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 335.00 6.50 +1.98 334.65 0.10
LME Alum 1981.50 -3.50 -0.18 2230.00 -11.14
LME Cu 7405.00 110.00 +1.51 7375.00 0.41
LME Lead 1906.00 4.00 +0.21 2432.00 -21.63
LME Nickel 16895.00 -55.00 -0.32 18525.00 -8.80
LME Tin 19710.00 10.00 +0.05 16950.00 16.28
LME Zinc 1885.50 17.50 +0.94 2560.00 -26.35
SHFE Alu 15930.00 55.00 +0.35 17160.00 -7.17
SHFE Cu* 54600.00 1270.00 +2.38 59900.00 -8.85
SHFE Zin 14855.00 170.00 +1.16 21195.00 -29.91
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
