METALS-LME copper slips as dollar firms; stimulus hopes support

Mon Jul 30, 2012 3:48am EDT

Related Topics

* Japan imports of nickel ore from Indonesia jump in June
    * China NBS factory activity index due on Wednesday
    * Coming up: Euro zone economic sentiment, July; 0900 GMT

 (Adds analyst, trader comment, details)
    By Melanie Burton
    SINGAPORE, July 30 (Reuters) - Copper turned lower on Monday
as the dollar firmed slightly but losses were limited by hopes
of new stimulus measures from Europe and the United States,
while traders also eyed factory data from top metals consumer
China for further trading cues.
    The European Central Bank's policy-setting meeting scheduled
for Thursday was always going to be important given the threat
the long-running euro zone crisis poses to the global economy,
but it has become pivotal after the ECB chief Mario Draghi's
pledge last week to do whatever was needed to save the euro.
    "There are still some feel good factors running through the
market," said senior commodities strategist Nick Trevethan of
ANZ in Singapore.
    "Draghi's comments have been reiterated by various other
European leaders. We should see some follow through buying
copper on optimism that we might see some more significant
action with the ECB and the FOMC meetings this week." 
    Three-month copper on the London Metal Exchange 
traded at $7,552 a tonne at 0721 GMT, down 0.21 percent after
gains of more than 1 percent in the previous session. Copper is
set to close the month down more than 1 percent, having shed
more than 13 percent from the year's high hit in February.
    The most-traded November copper contract on the Shanghai
Futures Exchange trimmed gains to 54,830 yuan ($8,600)
a tonne, up 0.11 percent. It hit a high above 55,300 yuan
earlier in the session.   
    Expectations of stimulus measures from both sides of the
Atlantic helped to lend a steadier tone to equities and
commodities markets across the board until the euro gave up
gains later in the session. 
    The euro slipped on Monday as short-term technical charts
flashed a bearish signal, while the dollar edged up by a slight
0.13 percent against a basket of currencies. A stronger
dollar makes commodities more expensive for holders of other
currencies. 
    The Federal Reserve holds a policy meeting on Tuesday and
Wednesday, with speculation rising it might do more to bolster
recovery after data showed U.S. second-quarter gross domestic
product expanded at the weakest pace since the third quarter of
2011. 
        
    CHINA EYED
    Copper prices this week will also take direction from data
out of top consumer China.
    "China's PMI number on Wednesday is the make or break. We're
looking for a stronger second half for copper, so this will be a
very important number," Trevethan added.
    China's official manufacturing sector index, to be released
on Wednesday, will be scoured for more evidence that loosening
steps taken by Beijing in the past few months have filtered down
to the real economy, helping stimulate growth and metals demand.
    The index may have inched up to 50.3 in July from 50.2 in
the previous month, reinforcing signs that the world's
second-largest economy is stabilising due to increased policy
support. 
    Positive signs emerged earlier this month that China's steps
were having an effect after a preliminary indicator showed
manufacturing output in July grew at its fastest pace in nine
months. 
    China is the world's biggest copper consumer, accounting for
40 percent of refined copper demand last year. But demand so far
in 2012 has been lacklustre as the world's biggest commodity
consumer has been hit by a slowdown in its export markets. 
    "It is a tough time for the industry right now," said a
Shanghai-based copper trader. 
    Other economic events that could swing commodities direction
for the week ahead include U.S. vehicle sales and construction
spending, while key non-farm payrolls data for July is due on
Friday. 
    In other metals, nickel prices have been supported by a
change in Indonesia's export regulation, traders said.
    Japan's imports of nickel ore from Indonesia grew more than
four times from a year earlier to 136,600 tonnes in June, the
Ministry of Finance's monthly customs data showed on Monday.
    Cargoes that had been delayed in the wake of the
implementation of a new tax in Indonesia arrived in May and
June, an official at Japan's Mining Industry Association told
Reuters last week. 
    LME nickel prices rose 0.1 percent, after hitting a
three-year trough of $15,450 last week.
PRICES
  Base metals prices at 0721 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7552.00    -16.00     -0.21     -0.63
  SHFE CU FUT NOV2    54830        60     +0.11     -0.96
  HG COPPER SEP2     342.40     -0.20     -0.06     -0.35
  LME Al             1896.50    -1.50      0.00     -6.11
  SHFE AL FUT NOV2    15410       -35     -0.23     -2.75
  LME Zinc          1846.25    -12.75     -0.69      0.07
  SHFE ZN FUT NOV2    14630       -05     -0.03     -1.12
  LME Nickel       15891.00     16.00     +0.10    -15.07
  LME Lead          1918.00     -7.00     -0.36     -5.75
  SHFE PB FUT      14970.00    -30.00     -0.20     -2.06
  LME Tin          18020.00    -80.00     -0.44     -6.15
  LME/Shanghai arb^    1357
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
 ($1 = 6.3807 Chinese yuan)

 (Editing by Himani Sarkar)
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