RTRS:METALS-Copper hits month high on hopes for U.S., China easing
* Short-covering lifts markets, investors wary on
follow-through
* China HSBC Flash PMI at nine-month low
* Near-dated tin prices climb on worries of supply shortage
(Adds quotes, details; updates price, previous SINGAPORE)
By Eric Onstad
LONDON, Aug 23 (Reuters) - Copper surged to a one-month peak
on Thursday for a third day, buoyed by fresh hopes that U.S. and
Chinese officials would unleash more stimulus measures to revive
their economies and boost metals demand.
The metal climbed after indications in minutes of the U.S.
Federal Reserve of possible stimulus plans and the release of
downbeat manufacturing data in China that raised prospects more
of further easing in the world's top raw materials consumer.
Some analysts, however, were wary of the strength of the
move in copper, which has rallied 4 percent this week from lows
on Monday, breaking through the ceiling of its recent range.
"I don't think this is a real move, I think most of what
we're seeing is short-covering at the moment. I think we're
going to need to see quite a bit more on the macro front," said
analyst Wiktor Bielski at VTB Capital in London.
Three-month copper on the London Metal Exchange
climbed 1.1 percent to $7,686.50 per tonne by 1008 GMT, off an
intraday peak of $7,705, the highest since July 20.
The dollar sank to a two-month low versus a broad basket of
currencies, making it cheaper for holders of other
currencies to buy commodities priced in dollars.
Copper has shed 12 percent since touching a peak of $8,765
in February. It has broken out of a range of $7,300-$7,600 that
trapped it for several weeks, but must challenge $7,800 to
spark further momentum, Bielski said.
In China, the most-traded December copper contract on the
Shanghai Futures Exchange advanced 1.17 percent to
close at 55,980 yuan ($8,800) per tonne.
The gains were triggered after minutes from the U.S. central
bank's latest meeting suggested the Fed was likely to deliver
another round of monetary stimulus fairly soon unless the
economy improved considerably.
Gains were initially tempered after data from China showed
factory activity in August shrank at the fastest pace in nine
months, but traders said the poor figures ultimately added fuel
to expectations for further easing by the world's second-biggest
economy.
"Following the relatively weak HSBC PMI data, market
expectations of further easing measures for China have also
increased -- but it's important to note that the HSBC number
tends to be fairly volatile," said Nick Trevethan, senior
commodity strategist at ANZ in Singapore.
China is the world's biggest user of copper, accounting for
40 percent of refined demand last year. Standard & Poor's
Ratings Agency said on Wednesday that China could afford another
big stimulus if conditions sharply deteriorated.
The market seemed to shrug off indications that the euro
zone was destined to return to recession after the Purchasing
Managers' Index survey from Markit notched up a seventh month of
contraction.
As the euro touched a seven-week high against the
dollar, sources at the European Central Bank told Reuters the
bank was considering to setting a yield target on purchases
under a new bond-buying programme but without making the levels
public.
TIN SHORTS
Near-dated tin prices have climbed on worries about a supply
shortfall after Indonesian producers said this month they would
halt exports because of low prices.
Cash tin on the LME was evaluated at a $9 premium to
three-month prices on Wednesday, compared to a premium of $1.50
on Tuesday. CMSN0-3
"With spec players still short, recent production closures
and a large warrant holder ... we think tin could still run
higher in the short term. The next big resistance point in the
charts for tin is the 100-day moving average at $19,786," RBC
Capital said in a note.
LME data shows one party holds 50-80 percent of tin warrants
<0#LME-WHL>
Three-month tin was the LME's top percentage gainer,
hitting the highest levels in nearly 2-1/2 months with a 2.1
percent move to $19,900 a tonne.
In other metals, aluminium added 1.3 percent to
$1,900 a tonne, zinc gained 1.1 percent to $1,854.50,
lead rose 1.4 percent to $1,945, the highest in over
three weeks, and nickel rose 1.4 percent to $16,300.
Metal Prices at 1011 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 349.40 3.95 +1.14 344.75 1.35
LME Alum 1897.25 22.25 +1.19 2020.00 -6.08
LME Cu 7685.50 80.50 +1.06 7600.00 1.13
LME Lead 1941.00 23.00 +1.20 2034.00 -4.57
LME Nickel 16265.00 185.00 +1.15 18650.00 -12.79
LME Tin 19959.00 464.00 +2.38 19200.00 3.95
LME Zinc 1853.25 18.25 +0.99 1845.00 0.45
SHFE Alu 15360.00 90.00 +0.59 15845.00 -3.06
SHFE Cu* 56100.00 660.00 +1.19 55360.00 1.34
SHFE Zin 14650.00 135.00 +0.93 14795.00 -0.98
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
