METALS-Copper ends up on US retail sales boost, bucks dlr

Mon Nov 15, 2010 4:52pm EST

 * Copper gains buck dollar strength
 * U.S. retail sales data provides economic boost
 * Coming up: U.S. October producer prices on Tuesday
 (Recasts with New York closing copper price, adds New York
dateline/byline, graphic and analyst comments)
 By Chris Kelly and Pratima Desai
 NEW YORK/LONDON, Nov 15 (Reuters) - Copper resisted a bearish
trend across the base metals complex on Monday, ending higher on
the back of strong retail sales data in the United States that
pointed to brighter economic prospects in the world's largest
economy.
 Lingering concerns about potential further monetary policy
tightening in top metals-consumer China weighed heavily on the
complex at the start of trade, dragging zinc CMZN3, nickel
CMNI3 and aluminum CMAL3 to multiweek lows and copper to its
lowest levels in more than a week.
 But red metal prices moved back into positive territory later
in the day, even as the dollar held firm, with upbeat U.S. data
leading some economically optimistic buyers back into the market,
analysts said.
 "A lot of the commodities are up today even though the dollar
is strengthening again," said Donald Selkin, chief market
strategist with National Securities Corp in New York.
 "I think that they are beginning to separate themselves a
little bit."
 Indeed, copper's negative correlation with the dollar has been
weakening since the start of the month.
 (Graphic: link.reuters.com/qaq55q )
 Benchmark copper CMCU3 on the London Metal Exchange fell to
$8,460 a tonne, its lowest since Nov. 4, before ending up $30 at
$8,645 a tonne.
 At the COMEX metals division of the New York Mercantile
Exchange, copper for December delivery HGZ0 followed a similar
pattern. It fell to its lowest in more than one week at $3.8495
per lb, before recovering to settle up 3.15 cents at $3.9250 a
lb.
 Bullish participants cheered data on Monday showing sales at
U.S. retailers rose more than expected in October to post their
largest gain in seven months. [ID:nLDE6AE1RH]
 "The retail sales number showed a little bit of strength and
optimism about the economy," Selkin said.
 The U.S. data helped ease some market jitters about monetary
tightening in China after data last week showed inflation in the
metals giant rose to a 25-month high in October and bank lending
was above expectations. [ID:nN15239736] [ID:nTOE6AA03C]
 The dollar rose to a six-week high against major currencies on
Monday, buoyed by a rise in U.S. Treasury yields that heightened
the appeal of U.S. assets, while the euro came under pressure as
Ireland's debt problems shook confidence in the euro zone. [USD/]
 The combination of recent positive U.S. macro data, fund
buying, dollar weakness and worries about inflation helped drive
copper to a record high of $8,966 a tonne last week.
 A supportive fundamental backdrop added to the upside
momentum.
 LME copper stocks fell by 75 tonnes to 362,700 tonnes on
Monday. Stockpiles are down more than 30 percent since hitting a
6-1/2 year high of 555,075 tonnes in the middle of February and
are at their lowest levels in more than a year. <0#LME-STOCKS>
 STRIKE WATCH
 Market players continued to monitor a workers' strike at the
world's No. 3 copper mine, Chile's Collahuasi, which entered its
11th day on Monday. The deposit operator said output is normal and
the union is vowing a long stoppage. [ID:nN15234973]
 Concern about supplies in the near term have pushed the metal
into a $21.5 a tonne backwardation -- premium for cash material
over the three-month contract MCU0-3 -- compared with a discount
of $20 a tonne at the end of October.
 "You don't like to sell copper when there is a strike on and
the market is so tight -- we've been saying sell zinc when you
think things have done enough. Sell zinc, nickel and lead," said
David Thurtell, analyst at Citi.
 In other metals, lead CMPB3 touched a two-week low of $2,412
a tonne before ending down $65 at $2,455.
 Steel ingredients were weak with zinc CMZN3 falling to
$2,264.75 a tonne, its lowest since Oct. 8, and nickel CMNI3
sliding to $21,980 a tonne, its lowest since Sept. 8.
 Zinc ended down $56 at $2,338 and nickel shed $35 to end at
$22,350 a tonne.
 Tin CMSN3 fell to its lowest in two weeks at $25,180 a
tonne, before ending down $1,100 at $25,900 a tonne.
 Aluminum CMAL3 eased $4 to close at $2,400 a tonne,
recovering from an earlier two-week low of $2,354 a tonne.
 Metal Prices at 1942 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       391.20        1.85     +0.48     334.65     16.90
 LME Alum      2399.00       -5.00     -0.21    2230.00      7.58
 LME Cu        8644.00       29.00     +0.34    7375.00     17.21
 LME Lead      2454.00      -66.00     -2.62    2432.00      0.90
 LME Nickel   22350.00     -350.00     -1.54   18525.00     20.65
 LME Tin      25895.00    -1105.00     -4.09   16950.00     52.77
 LME Zinc      2338.00      -56.00     -2.34    2560.00     -8.67
 SHFE Alu     16795.00      105.00     +0.63   17160.00     -2.13
 SHFE Cu*     64930.00     -710.00     -1.08   59900.00      8.40
 SHFE Zin     18705.00    -1230.00     -6.17   21195.00    -11.75
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
 (Additional reporting by Michael Taylor in London; editing by
Keiron Henderson and Jim Marshall)

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