METALS-Copper falls on firm dollar, euro nerves
* China manufacturing activity may contract in Dec - poll * Italian bond yields fall from record at auction * U.S. housing data points to tentative recovery By Susan Thomas LONDON, Dec 29 (Reuters) - Copper fell on Thursday for a second straight day on a firm dollar, investor caution over the euro zone sovereign debt crisis and worries about growth in big metals consumer China. Copper has fallen around 23 percent this year, after a 30 percent gain in 2010 and a 140 percent jump in 2009, as the euro zone debt crisis slowed credit and prompted investors to switch to safer assets including the U.S. dollar. Three-month copper on the London Metal Exchange closed at $7,425 a tonne from $7,465 on Wednesday, extending a loss of 2.4 percent from the previous session. It went briefly into positive territory after U.S. data showing pending sales of previously owned homes jumped to a 1-1/2 year high in November, adding to signs of a tentative recovery in the housing market. Copper is used extensively in building construction. But an Italian debt sale unsettled markets. Italian bond yields fell from recent record highs at auction on Thursday but cautious investors still demanded a near 7 percent yield to buy 10-year paper, a level seen unsustainable over time for the euro zone's third-largest economy. Analysts also doubt whether domestic progress on reform would be enough to see Italy smoothly over its refinancing hurdles from January to April. "The news that continues to move the market is the EU debt crisis," said Credit Suisse analyst Tobias Merath. "The liquidity story is affecting base metals more than other assets," he added, pointing to the flight out of assets perceived as risky and the effect the economic slowdown is having on base metals which are widely used in industry. Euro zone banks received 489 billion euros last Friday in the first of two opportunities to access this longer-term money - operations the European Central Bank (ECB) hopes will encourage banks to unclog lending to one another and then onto customers in spite of the region's debt crisis. But despite being awash with liquidity, banks still appear distrustful and prefer to deposit their money at the ECB's overnight facility rather than lend to one another. Loans to private sector firms in the euro zone fell in November, ECB data showed, increasing fears that the region faces a credit crunch, an issue of growing concern for the central bank as the worsening sovereign debt crisis makes firms and households increasingly wary about taking on debt. The dollar was firm against a basket of currencies as the euro slid to a 15-month low against the dollar. Gains in the dollar can pressure dollar-denominated commodities by making them more expensive for consumers using other currencies. Worries about the impact of the euro zone problems on copper demand were compounded by evidence of slowing growth in China, the world's top consumer of the metal. China's manufacturing activity may contract again in December, a poll of economists showed ahead of the official purchasing managers index release on Jan. 1, suggesting the world's second-largest economy is finishing 2011 on a weak note. "Concerns remain about Europe and growth in China and we don't see that changing before year end," RBC Base Metals said in a note to clients. ALUMINIUM Three-month aluminium, untraded at the close, was bid at $1,991 from $1,999 at the close on Wednesday. Western world unwrought aluminium stocks rose to 1.456 million tonnes in November compared with a revised 1.406 million in October, industry data showed on Wednesday, signalling retreating demand for the metal. Tin, which has fallen around 44 percent since a record $33,600 hit in April, closed at $18,800 from $18,600 . Zinc closed at $1,832 from $1,810.5 , lead at $1,999 from $1,960 and nickel at $18,050 from a last bid of $17,900. Metal Prices at 1700 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct move COMEX Cu 337.60 1.20 +0.36 444.70 -24.08 LME Alum 1990.25 -8.75 -0.44 2470.00 -19.42 LME Cu 7449.25 -15.75 -0.21 9600.00 -22.40 LME Lead 1998.00 38.00 +1.94 2550.00 -21.65 LME Nickel 18154.00 -351.00 -1.90 24750.00 -26.65 LME Tin 18810.00 210.00 +1.13 26900.00 -30.07 LME Zinc 1829.50 19.00 +1.05 2454.00 -25.45 SHFE Alu 15855.00 -60.00 -0.38 16840.00 -5.85 SHFE Cu* 54220.00 -950.00 -1.72 71850.00 -24.54 SHFE Zin 14575.00 -180.00 -1.22 19475.00 -25.16 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
- North Korea says Kim's powerful uncle dismissed for 'criminal acts'
- Protesters fell Lenin statue, tell Ukraine's president 'you're next'
- Thai PM calls snap election, protesters press on
- Billy Joel, Shirley MacLaine feted at Kennedy Center Honors
- Singapore hit by rare outbreak of rioting, 27 arrested |