METALS-LME copper down as dollar firms after US jobs data

Mon Oct 8, 2012 3:25am EDT

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* London copper gives up last week's gains
    * Weak fundamentals weigh on Shanghai copper
    * End to QEIII feared as U.S. jobs data improves

 (Updates prices; adds quotes, details)
    By Carrie Ho
    SHANGHAI, Oct 8 (Reuters) - London copper fell more than 1
percent on Monday, giving up last week's gains as worries about
the world economy resurfaced, while investors awaited trade data
from top consumer China later this week for clues on demand.
    Fears over the outlook for the global economy, struggling
with a worrisome debt crisis in Spain and Greece and a fragile
economic recovery in the United States, are blunting optimism
over the measures major central banks rolled out last month to
support fragile economies. 
    The euro zone's largest economy, Germany, posted a drop in
industrial orders in August, while a firm dollar after a
surprise fall in the U.S. jobless rate also curbed metal prices.
A stronger dollar makes commodities priced in the greenback more
expensive for holders of other currencies. 
    China is expected to announce export-import data for
September on Saturday. 
    Three-month copper on the London Metal Exchange fell
1.3 percent to $8,185.75 per tonne by 0700 GMT, weighed down by
the dollar, which hovered near a two-week high. 
    London copper is also pressured by high LME inventories,
which have risen over 10,000 tonnes since early August, Friday's
data showed, hinting at slower global demand for the metal. 
    "There are further signs of copper flowing into New Orleans,
which together with St. Louis, are the closest LME warehouses to
South America. The inflow of copper there may reflect a shifting
of inventories from South America to the LME," said Chinese
state-backed commodities research firm Minmetals Futures in a
client note.
    The data also showed copper on warrant in New Orleans and
St. Louis making up over 40 percent of the LME's total copper
stocks on warrant. MCUSTX-TOTAL 

    CHINA FUNDAMENTALS EYED
    The most active January copper contract on the Shanghai
Futures Exchange lost 1.4 percent to 58,930 yuan
($9,400) per tonne, as Chinese traders returned to the market
from a week-long national holiday to find few signs of
downstream demand improving. 
    Risk appetite in metals was also partly dented by weaker
equities in domestic markets, which reflected investor caution
over the global outlook and upcoming corporate earnings reports.
 
    "Stock markets are weighing on base metals today," said
Orient Futures Derivatives Director Andy Du.
    "Investors are also dismayed by sluggish downstream demand
in China. In copper, spot prices are still trading at a large
discount to prompt-month futures. If this continues, there may
be more downside room to copper futures."
    Chinese prices of spot copper were trading at a discount of
150 yuan per tonne to the ShFE front-month October contract
  by the session close, pointing to still weak
consumer demand. Spot aluminium, zinc and lead were also trading
lower than their Shanghai front-month futures.  
    Underlining the uncertain outlook for the global economy,
the World Bank cut its growth forecasts for the East Asia and
Pacific region on Monday and said there was a risk the slowdown
in China could get worse and last longer than expected. 
    China, which accounted for 40 percent of demand for refined
copper last year and is a key commodities consumer, will release
at the end of next week growth data for the third quarter, which
analysts expect to be the weakest three months of the year. 

    
                                                               
  Base metals prices at 0700 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8185.75   -109.25     -1.32      7.71
  SHFE CU FUT JAN3    58930      -840     -1.41      5.93
  LME Alum          2089.00    -21.00     -1.00      3.42
  SHFE AL FUT JAN3    15705      -100     -0.63     -0.85
  HG COPPER DEC2     373.25     -4.55     -1.20      8.63
  LME Zinc          2048.00    -27.00     -1.30     11.00
  SHFE ZN FUT JAN3    15520      -260     -1.65      4.90
  LME Nickel       18139.00   -161.00     -0.88     -3.05
  LME Lead          2260.00    -28.00     -1.22     11.06
  SHFE PB FUT         16040      -180     -1.11      4.91
  LME Tin          22250.00   -150.00     -0.67     15.89
  LME/Shanghai arb    1268
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE 
 third month
 ($1 = 6.2849 Chinese yuan)

 (Editing by Clarence Fernandez and Miral Fahmy)
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