METALS-Copper slips after 4-day rise, economic woes drag
(Adds detail, updates prices) * LME copper curve flattens as nearby demand slips CMCU0-3 * China on holiday this week; ShFE closed * Coming up: euro zone Markit Services PMI at 0758 GMT By Melanie Burton SINGAPORE, Oct 3 (Reuters) - Copper fell on Wednesday after climbing for four days, as a fragile global economy and Europe's lingering debt crisis curbed buying interest, with a week-long public holiday in top copper consumer China keeping trading volumes extremely thin. Prices have been caught in a tug of war between liquidity bulls who view central bank easing as a reason to buy hard assets and investors who are bearish on fundamentals, seeing a structural shift in China's demand for metals taking the heat out of commodity price gains. "On one hand you have the more positive vibe from U.S. players with people encouraged by policy action there. But data from China is still showing the economy is bottoming -- not yet improving -- and you still have this political paralysis going on ahead of the leadership transition in China," said ANZ commodity strategist Nick Trevethan. "We typically will see demand pick up in December. The question is, will it is pick up as significantly as in the past? I don't think so." Three-month copper on the London Metal Exchange had eased 0.85 percent to $8,255.00 a tonne by 0715 GMT, after climbing more than 2 percent over the past four sessions. Despite recent gains, copper has been trapped in a narrow range in lean volumes with China away since Monday. The volume of copper traded on LME Select stands at less than 2,500 lots so far. The industrial metal hit a 4-1/2 month peak of $8,422 on Sept. 19, powered by stimulus measures from central banks to bolster a flagging global economy. Still, Standard Chartered said it sees prices targeting all-time market highs of $10,190 a tonne in the next 12 months. "While downside risks are high, we believe that the fundamental outlook has improved owing to central bank action and we expect prices to trend higher in the year ahead as better fundamentals slowly feed through," it said in a research note. "We have upgraded our Q4 copper price forecast to $8,500 a tonne from $8,000/t previously. We recommend that consumers accumulate copper on dips towards $8,000/t as we expect any weakness to be short-lived. Prices are likely to target $8,875 in the months ahead." FOCUS ON THE U.S. Further signs of slowing expansion in China, which accounted for 40 percent of refined copper demand last year, came on Wednesday, with the country's official purchasing managers' index for the services sector falling to 53.7 in September from 56.3 in August. Reflecting a lack of nearby interest in copper, the LME forward curve has flattened with cash copper trading at a small discount to three-month prices on Tuesday from a $6.50 premium at the end of September. CMCU0-3 The United States will be in focus this week with nonfarm payrolls data for September due on Friday after U.S. autosector sales posted their best showing in 4-1/2 years. The Federal Reserve in September began a bid to buy $40 billion in mortgage-backed securities every month until the jobs outlook improved substantially and Friday's numbers will be the initial test of whether that is paying off. U.S. employers are expected to have added 113,000 jobs to their payrolls last month, an increase from 96,000 in August. Base metals prices at 0715 GMT Metal Last Change Pct Move YTD pct chg LME Cu 8255.00 -70.50 -0.85 8.62 SHFE CU FUT JAN3 -- -- -- -- HG COPPER DEC2 376.35 -3.75 -0.99 9.53 LME Alum 2090.25 -16.75 -0.79 3.48 SHFE AL FUT JAN3 -- -- -- -- LME Zinc 2077.25 -20.75 -0.99 12.59 SHFE ZN FUT JAN3 -- -- -- -- LME Nickel 18472.00 22.00 +0.12 -1.27 LME Lead 2278.00 -22.00 -0.96 11.94 SHFE PB FUT -- -- -- -- LME Tin 22000.00 -295.00 -1.32 14.58 LME/Shanghai arb^ 923 Shanghai and COMEX contracts show most active months (Additional reporting by Manolo Serapio Jr.; Editing by Joseph Radford and Ed Davies)
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