METALS-Copper steady as investors await Greek debt deal

Mon Nov 26, 2012 1:23pm EST

* Hope remains that U.S. fiscal cliff will be averted
    * Investors await China PMI for confirmation of growth
    * Agreement of ministers on Greece already priced in-analyst

    By Maytaal Angel and Silvia Antonioli
    LONDON, Nov 26 (Reuters) - Copper steadied on Monday after a two-week rally,
as investors awaited the outcome of talks on providing emergency loans to keep
Greece afloat, although signs of economic recovery in China kept a floor under
prices of the metal.
    Euro zone finance ministers and the International Monetary Fund made their
third attempt in as many weeks to agree on releasing emergency aid for Greece,
with policymakers saying a write-down of Greek debt is off the table for now.
Greek Finance Minister Yannis Stournaras said he was confident the ministers
would reach a deal. 
    "I think everyone is expecting a solution tonight," said Daniel Briesemann,
commodities analyst at Commerzbank in Frankfurt. "An agreement of the finance
ministers is already priced in so we will only see some market movement if they
don't come to an agreement regarding Greece."
    In China however, data showed last week that the manufacturing sector
bottomed in October, while factory activity numbers signalled economic growth
had revived after seven consecutive quarters of slowdown. 
    Investors will be watching China's official purchasing manufacturers' index
(PMI), due at the end of the week, for further confirmation of the trend. China
is the world's top copper consumer, accounting for some 40 percent of demand.
 
    Three-month copper on the London Metal Exchange closed at $7,780 a
tonne, versus $7,777 at the close on Friday. Prices have climbed almost 3
percent over the last two weeks.   
    "I still think (copper) will continue to rally into end year. Our house view
is Europe will continue to dodge various bullets and the U.S. fiscal cliff will
be resolved somehow," said BNP Paribas analyst Stephen Briggs.
    The White House and Congress are set to resume negotiations this week to
avoid a series of automatic tax hikes and spending cuts worth $600 billion set
for January, which analysts fear could tip the world's biggest economy into
recession.
    U.S. lawmakers have made little progress in the last 10 days toward a budget
deal, though lawmakers in both the Democratic and Republican parties have been
working hard to convince the public they are willing to compromise and can reach
a deal before the end of the year. 
        
    CHINA STOCKPILES SWELL
    Though hopes were high that China's economy had bottomed, investors remained
mindful of high copper inventories in the country and tepid import demand growth
linked to a slowdown in export markets, especially Europe.
    Copper stocks in China's bonded warehouses hit a record high of more than 1
million tonnes this month. 
    "We think metals prices will continue rangebound for the rest of the year. A
positive PMI (purchasing managers' index) number should help a little bit, but
we have not seen any significant improvement in the real economy yet," said
Beijing-based metals analyst Wan Ling of commodities research house CRU Group.
    In other metals traded, soldering material tin closed at $20,825 a
tonne from Friday's close at $20,850, while zinc, used to galvanize
steel, finished at $1,982 from $1,961, as LME data showed 14,800 tonnes of zinc
booked to leave warehouses in New Orleans, extending the multi-month metals
backlog there. 
    Elsewhere, battery material lead closed at $2,183 a tonne, from a
$2,195 close on Friday.
    Aluminium, untraded at the close, was last bid at $1,999.50 from
$1,983, while stainless-steel ingredient nickel closed at $16,455 from
$16,620.
 Metal Prices at 1751 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       353.60        0.80     +0.23     344.75      2.57
  LME Alum      1996.25       13.25     +0.67    2020.00     -1.18
  LME Cu        7792.75       15.75     +0.20    7600.00      2.54
  LME Lead      2182.25      -12.75     -0.58    2034.00      7.29
  LME Nickel   16548.00      -72.00     -0.43   18650.00    -11.27
  LME Tin      20770.00      -80.00     -0.38   19200.00      8.18
  LME Zinc      1983.25       22.25     +1.13    1845.00      7.49
  SHFE Alu     15370.00       30.00     +0.20   15845.00     -3.00
  SHFE Cu*     56240.00      100.00     +0.18   55360.00      1.59
  SHFE Zin     15140.00       95.00     +0.63   14795.00      2.33
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07
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