RTRS:METALS-Copper edges higher on demand optimism, euro zone eyed
* Investors eye key China, U.S. data next week
* Spain to announce budget cuts, economic reforms
* Coming up: U.S. durable goods for August
By Harpreet Bhal and Melanie Burton
LONDON/SINGAPORE, Sept 27 (Reuters) - Copper edged higher on Thursday on
optimism that demand from top copper consumer China would recover by year-end,
though an upcoming holiday in China and persistent concerns about Europe's debt
crisis kept gains in check.
Benchmark copper on the London Metal Exchange (LME) rose to
$8,165.50 a tonne at 0916 GMT, up 0.6 percent from a close of $8,120 on
Wednesday.
Stimulus measures announced by the U.S. Federal Reserve and the European
Central Bank have helped put copper on track for a gain of more than 7 percent
for September. It is trading 7.5 percent higher in the year to date.
"People are a bit more clear on the macro outlook for China for the end of
the year. It is likely to register growth of just under 8 percent so that will
be positive for base metals," said Andrey Kryuchenkov, analyst at VTB Capital.
"But until we hear more about what is happening in Spain and the euro zone,
copper is likely to trade within its current range."
Copper product makers in China, where demand is expected to improve modestly
in the fourth quarter, are getting their books in order before a week-long
holiday beginning on Monday that is likely to pare volume and direction from the
market.
China accounts for around 40 percent of global demand for refined copper.
"You're only two days away from the start of big holidays in China, so
people are looking to square books and cut risk," said Ivan Szpakowski, a Credit
Suisse analyst in Singapore.
"The other thing people have been looking at is how much central bank action
flows through to the real economy, but for that we may have to wait until top
tier data next week."
Economic data due next week is likely to provide fresh direction for metals
prices. China's National Bureau of Statistics manufacturing PMI for September is
due on Oct. 1, with U.S. non-farm payrolls data for September on Oct. 5.
SPAIN CONCERNS
Gains in base metals were capped by worries about the euro zone debt crisis
and uncertainty about a bailout for Spain.
Spain will announce a series of economic reforms and a tight 2013 budget on
Thursday, aiming to avoid the political humiliation of having Brussels impose
conditions on a request for an international bailout.
Euro zone economic sentiment defied expectations of stabilisation and again
fell sharply in September, underlining the economic gloom brought on by the
sovereign debt crisis as the euro zone sinks into a recession.
"We would want to sell into any near-term strength as (copper) prices look
likely to move down to $8,000, and possibly $7,800, in the next four to six
weeks - as the stimulus fever burns out and market jitters about Europe and
China return to the fore," said ANZ in a research note.
In other metals, battery material lead rose to $2,274.75 a tonne
from Wednesday's close of $2,264, and zinc climbed to $2,082 from
$2,071. Tin was at $20,980 from Wednesday's close of $20,800.
Aluminium rose to $2,093.75 a tonne. It was untraded at the close of
Wednesday, but bid at $2,072.
Stainless steel material nickel rose to $18,246 a tonne. It was
untraded at the close but bid at $18,055.
Colombia's government said it expects output from the Cerro Matoso nickel
mine to rise to 51,100 tons in 2012 from 37,810 last year. It also announced it
would renegotiate outdated contract terms including royalty payments from the
BHP Billiton mine.
On Wednesday, global miner Xstrata said it was suspending operations
at its Cosmos nickel mine in Western Australia due to prolonged weakness in
prices for the metal and a strong Australian dollar.
Metal Prices at 0920 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 372.70 1.50 +0.40 344.75 8.11
LME Alum 2093.50 -11.50 -0.55 2020.00 3.64
LME Cu 8165.00 45.00 +0.55 7600.00 7.43
LME Lead 2273.25 9.25 +0.41 2034.00 11.76
LME Nickel 18241.00 -159.00 -0.86 18650.00 -2.19
LME Tin 21000.00 200.00 +0.96 19200.00 9.38
LME Zinc 2082.25 11.25 +0.54 1845.00 12.86
SHFE Alu 15695.00 10.00 +0.06 15845.00 -0.95
SHFE Cu* 59100.00 -20.00 -0.03 55360.00 6.76
SHFE Zin 15580.00 30.00 +0.19 14795.00 5.31
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
