By Silvia Antonioli and Melanie Burton
LONDON/SINGAPORE, July 16 (Reuters) - Copper edged up on Tuesday
helped by a weaker dollar as investors waited for further signals on
when the U.S. Federal Reserve might begin to rein in its monthly
bond-buying programme.
The dollar eased versus a basket of currencies but its losses were
limited, supported by the view that the Federal Reserve is likely to be
the first among major central banks to move away from ultra-loose
monetary policy.
A weaker U.S. currency makes prices of dollar-priced goods such as
metals, cheaper for holders of other units.
Markets are waiting for Fed Chairman Ben Bernanke to testify to
Congress this week for more on when the U.S. plans to scale back its
huge bond-buying programme, which has supported demand for commodities.
Central banks around the world have maintained looser monetary
policies in the last few years to counter weaker economic growth.
Benchmark copper on the London Metal Exchange was up 0.6
percent to $6,952 a tonne by 0831 GMT, after falling half a percent the
previous session.
Copper prices hit a nearly 1-month high at $7,049.25 a tonne on July
11, but have failed to gain traction above $7,000 and are down about 12
percent this year.
"The overly pessimistic market in the past few weeks and months is
making copper vulnerable to a short-term recovery," said Eugen Weinberg,
head of commodity research at Commerzbank.
"Much of the growth fears are already priced in. So I don't see much
potential to the downside. But any price increase is going to be
gradual. The Chinese demand situation remains very challenging."
China's economic growth slowed to 7.5 percent in the second quarter,
from 7.7 percent in the first quarter, the ninth quarter in the last 10
that expansion has weakened.
China is the world's largest buyer of copper and it makes up about
40 percent of global consumption.
In other economic data, U.S. retail sales rose less than expected in
June, data showed on Monday, in a sign of a slowdown that could offer a
cautionary note to the Fed.
Underlining a softening outlook for metals demand, the Asian
Development Bank (ADB) on Tuesday lowered its growth forecasts for
developing Asia this year and next as a softer outlook for China meant
subdued economic activity elsewhere in the region.
Also blurring the picture for copper demand, a crackdown in China
aimed at curbing distorted credit growth has triggered growing appetite
for the use of commodities as collateral to raise cash, inflating copper
imports.
In other metals, nickel was little change from Monday's
close at $13,500.
The global nickel market was in surplus by 12,000 tonnes in May, up
from 8,700 in April, a monthly bulletin from the Lisbon-based
International Nickel Study Group showed on Monday.
Metal Prices at 0836 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2012 Ytd Pct
move
COMEX Cu 3.16 0.01 +0.27 365.25 -99.14
LME Alum 1799.00 -5.00 -0.28 2073.00 -13.22
LME Cu 6950.75 30.75 +0.44 7931.00 -12.36
LME Lead 2046.25 -8.75 -0.43 2330.00 -12.18
LME Nickel 13501.00 -4.00 -0.03 17060.00 -20.86
LME Tin 19306.00 -84.00 -0.43 23400.00 -17.50
LME Zinc 1880.50 -11.50 -0.61 2080.00 -9.59
SHFE Alu 14340.00 -15.00 -0.10 15435.00 -7.09
SHFE Cu* 50400.00 290.00 +0.58 57690.00 -12.64
SHFE Zin 14725.00 30.00 +0.20 15625.00 -5.76
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
