RTRS:METALS-Copper steadies; growth, demand fears cap gains
* Euro drops to session low versus dollar
* Global growth fears, China demand worries cap gains
* Coming up: U.S. housing starts at 1230 GMT
By Harpreet Bhal
LONDON, July 18 (Reuters) - Copper steadied on Wednesday
after falls in the previous session following a lack of an
indication of further stimulus measures from the U.S. Federal
Reserve, but gains were capped by a weak euro and concerns about
Europe's debt crisis and metals demand.
Three-month copper on the London Metal Exchange rose
to $7,602 a tonne at 1008 GMT, up 0.1 percent from a close of
$7,595 a tonne on Tuesday.
Prices were pressured by falls in the euro versus the
dollar, with traders citing a media report that quoted German
Chancellor Angela Merkel as saying she could not be sure the
European project would work.
A strong dollar makes commodities priced in the U.S. unit
more expensive for holders of other currencies.
Lingering worries about a slowdown in the global economy and
Europe's persistent debt crisis kept investors cautious. In
addition, China - the world's biggest copper consumer - faces
its slowest growth in three years, raising concerns about the
outlook for demand.
"Everyone is concerned about what is going on in Europe and
also about the U.S. where economic numbers have been
disappointing," said Nic Brown, head of commodities research at
Natixis.
"And although we continue to like the look of the second
half of the year in China, there is no denying that second
quarter growth there was horrid."
In his testimony on Tuesday, Chairman Ben Bernanke said the
Federal Reserve stands ready to offer more stimulus as needed,
leaving the door open for further monetary easing but stopped
short of signalling action in the near term.
"It appears that the Fed is prepared to do whatever is
necessary and it seems to be unhappy that the politicians are
making no progress in solving the fiscal problems until after
the (U.S.) election. Bernanke acknowledges that it may be
necessary for the Fed to step in at some point," Brown said.
Trading volumes were thinned by Europe's summer season,
where much of the industry shuts down for a break. Highlighting
the lack of conviction in the market, open interest in copper is
its lowest since July 2009.
Copper prices are trading 0.8 percent lower so far this
month, having shed 9 percent in the second quarter as it hit a
2012 low of $7,219.50 a tonne in June.
CHINA CONCERNS
In China's physical markets, traders are handling less base
metals volumes than the same time last year, one Shanghai-based
physical trader noted.
"Consumer demand for base metals has been hit by a sluggish
business climate in China, while Beijing's recent injections of
liquidity into the system have also reduced the need for people
to buy base metals as collateral for financing," he said.
Highlighting mounting concerns about China's sagging
economy, Premier Wen Jiabao said the country's job market could
turn for the worse and the government needed to step up efforts
to create more jobs.
In industry news, mining giant BHP Billiton
reported annual copper output growth of 15 percent in the June
quarter.
In other metals traded, battery material lead was at
$1,886 from Tuesday's close of $1,893, while zinc, used
in galvanizing, was at $1,859.25 from $1,865 and aluminium
slipped to $1,900.75 from $1,904.
Soldering metal tin was at $18,706 from $18,895
while stainless-steel ingredient nickel slipped to
$16,036 from $16,100.
Metal Prices at 1012 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2011 Ytd Pct
move
COMEX Cu 345.30 -0.15 -0.04 344.75 0.16
LME Alum 1900.25 -3.75 -0.20 2020.00 -5.93
LME Cu 7605.50 10.50 +0.14 7600.00 0.07
LME Lead 1885.25 -7.75 -0.41 2034.00 -7.31
LME Nickel 16026.00 -74.00 -0.46 18650.00 -14.07
LME Tin 18725.00 -170.00 -0.90 19200.00 -2.47
LME Zinc 1858.50 -6.50 -0.35 1845.00 0.73
SHFE Alu 15565.00 -15.00 -0.10 15845.00 -1.77
SHFE Cu* 55820.00 -100.00 -0.18 55360.00 0.83
SHFE Zin 14785.00 -15.00 -0.10 14795.00 -0.07
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
