METALS-Copper off 2-month low, cautious ahead of US vote

Tue Nov 6, 2012 12:37pm EST

* Greek strike, U.S. fiscal cliff keep lid on prices
    * China spot copper demand still sluggish
    * Bonded warehouses copper stocks at 750,000 T- Macquarie

    By Silvia Antonioli
    LONDON, Nov 6 (Reuters) - Copper rose slightly on Tuesday, recovering from a
two-month low hit the previous session, as the lower price triggered new buying,
but gains were capped by uncertainty ahead of the  presidential election in the
United States.
    Benchmark London Metal Exchange copper closed at $7,700 a tonne from
a close of $7,650 on Monday, when the metal hit a two-month low at $7,596.
    World stock markets rose on Tuesday as American voters went to the polls,
with the tightly fought U.S. presidential election keeping trade subdued, while
the euro held steady despite uncertainty over Greece's next financial aid
payment.  
    A leadership transition in China and strikes in Greece over a new austerity
package also kept sentiment in check. 
    Lending a little support to metals prices, data on Monday showed that the
HSBC Purchasing Managers Index for China's services sector slipped in October
from September's four-month high but remained above the 50-point level that
indicates accelerating growth.   
    "We had the China PMI back slightly above 50 level and that, in combination
with an oversold market and some position squaring ahead of the U.S. election,
caused a bit of a push higher. How long it will be sustained for it's difficult
to say," Societe Generale analyst Robin Bhar said.
    Copper prices rallied nearly 8 percent in September, fuelled by a third
round of quantitative easing (QE) by the U.S. Federal Reserve, the promise of
bond buying by the European Central Bank (ECB) and stimulus measures in Japan
and China.
    The metal then lost more than 5 percent in October as expectations that real
demand would improve failed to materialise. It is now trading up just 1 percent
in the year to date.
    
        
    LOW DEMAND, HIGH STOCKS
    Spot copper prices in China traded at a discount to the Shanghai Futures
Exchange front-month futures prices, indicating slow restocking by the
world's top consumer.
    Most of China's copper inventories are in bonded warehouses, estimated to
hold around 750,000 tonnes as compared with over 300,000 tonnes at the end of
2011, but Beijing is expected to stimulate China's economy through
infrastructure investments.
    The country is expected to soon resume stockpiling of some base metals,
including copper and aluminium, buying them from domestic smelters hurt by weak
demand. 
    Three-month aluminium, untraded at the close, was bid at $1,920
tonne from $1,906 at the close on Monday.
    Three-month nickel closed at $16,075 from $15,900, zinc at
$1,899 from $1,869, tin at $20,625 from $20,100 and lead at
$2,165 from $2,127.
    
 Metal Prices at 1717 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2011   Ytd Pct
                                                              move
  COMEX Cu       350.65        3.65     +1.05     344.75      1.71
  LME Alum      1922.00       16.00     +0.84    2020.00     -4.85
  LME Cu        7722.25       72.25     +0.94    7600.00      1.61
  LME Lead      2174.25       47.25     +2.22    2034.00      6.90
  LME Nickel   16094.00      194.00     +1.22   18650.00    -13.71
  LME Tin      20652.00      552.00     +2.75   19200.00      7.56
  LME Zinc      1900.75       31.75     +1.70    1845.00      3.02
  SHFE Alu     15300.00       10.00     +0.07   15845.00     -3.44
  SHFE Cu*     56050.00      230.00     +0.41   55360.00      1.25
  SHFE Zin     14830.00      100.00     +0.68   14795.00      0.24
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07