METALS-London copper holds under $8,000, capped by demand fears

Mon Apr 16, 2012 10:17pm EDT

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SHANGHAI, April 17 (Reuters) - London copper ducked below
$8,000 a tonne again on Tuesday after closing the two previous
sessions below this level, as fears over easing global demand
weighed on the market.	
    Sentiment remains fragile over slowing growth in China,
which consumes 40 percent of the world's copper, and rising
Spanish and Italian debt costs, which threaten to spark a new
phase in the eurozone debt crisis. 	
     This was despite Monday's strong retail sales data out of
the United States, which suggested that economic growth in the
first quarter was probably not as weak as many had feared.	
    	
    FUNDAMENTALS	
    * Three-month copper on the London Metal Exchange 
ticked down 0.1 percent to $7,973 a tonne by 0112 GMT, hovering
near a three-month low. It ended the prior session 0.1 percent
lower.	
    * The most-active July copper contract on the Shanghai
Futures Exchange rose 0.4 percent to 56,930
yuan($9,000) per tonne, after Shanghai had closed 2.3 percent
lower in the previous session.	
    * Spain and Italy faced growing market pressure on Monday,
stoking fears of a new phase in the euro zone debt crisis as
Madrid's budget problems threatened to drag in other southern
European economies. 	
    * Recent data showed that China's economy expanded at an
annualised rate of 8.1 percent in the first quarter from a year
earlier, slower than the forecasted 8.3 percent. 
 	
    * "...we have gone on record as saying we suspect the
deceleration [of China's economic growth] will be deeper and
last longer than the conventional forecasts have it, meaning
that the metals outlook for the balance of the year will be
restrained at best," said INTL FC Stone analyst Edward Meir in
his latest note.	
     * Americans shrugged off high gasoline prices in March and
spent more strongly than expected, pushing retail sales up by
0.8 percent. 	
    *  But tempering the markets' enthusiasm were Monday's
comments by two top Federal Reserve officials, who pointed to
last month's surprisingly weak jobs report as all the more
reason to take a wait-and-see approach to a U.S. economy that,
in general, is improving.                	
       	
    MARKET NEWS	
    * Asian shares were capped while the euro eased on Tuesday,
as soaring Spanish borrowing costs underscored the fading impact
of the European Central Bank's bond purchases and stoked
investor nervousness over euro zone debt. 	
    * Gold hovered above the key support level at $1,650 an
ounce on Tuesday, off a one-week low hit in the previous
session, as investors watched the Spanish debt market with
growing worries about a new phase of the debt crisis in Europe.
 	
             	
    DATA/EVENTS (GMT)	
0430  Japan     Industrial output rev    Feb       	
0500  Japan     Consumer confid. index   Mar      	
0900  EZ        Inflation, final yy      Mar      	
0900  Germany   ZEW economic sentiment   Apr      	
1145  U.S.      ICSC chain stores yy     Weekly   	
1230  U.S.      Build permits: change mm Mar       	
1230  U.S.      House starts mm: change  Mar      	
1315  U.S.      Industrial output mm     Mar        	
    	
  Base metals prices at 0112 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7973.00     -7.00     -0.09      4.91
  SHFE CU FUT JUL2    56930       210     +0.37      2.34
  LME Alum          2072.50      7.50     +0.36      2.60
  SHFE AL FUT JUL2    16070        20     +0.12      1.45
  HG COPPER MAY2     360.95     -1.85     -0.51      5.05
  LME Zinc          1995.00     -3.00     -0.15      8.13
  SHFE ZN FUT JUL2    15390        45     +0.29      4.02
  LME Nickel       17751.00    251.00     +1.43     -5.13
  LME Lead          2067.50    -10.50     -0.51      1.60
  SHFE PB FUT         15650        80     +0.51      2.35
  LME Tin          21400.00      0.00     +0.00     11.46
  LME/Shanghai arb    1978
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE 
 third month
                                                               
 ($1 = 6.3150 Chinese yuan)	
	
 (Reporting by Carrie Ho; Editing by Ed Davies)
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