METALS-Copper rises on Greek debt deal, dollar limits gains

Tue Nov 27, 2012 12:50pm EST

* Dollar rises on U.S. consumer confidence data, euro falls
    * China approves construction of subway projects worth $7.87 bln
    * U.S. business spending plans gauge rebounds

    By Silvia Antonioli
    LONDON, Nov 27 (Reuters) - Copper rose on Tuesday after an agreement by
international lenders to reduce Greece's debt lifted investor sentiment,
although gains were limited as the dollar advanced on data showing U.S. consumer
confidence at a four-and-a-half-year high.
    After 12 hours of talks, international lenders agreed on a package of
measures to reduce Greece's debt, paving the way for the release of urgently
needed aid loans. 
    "It is certainly a positive development that Greece finally can receive this
package as far as base metals are concerned," VTB Capital analyst Andrey
Kryuchenkov said.
    "A Greek deal however was mostly priced in. Most people expected a positive
outcome. That is why the (metals) market has not moved up that much."
    Benchmark copper on the London Metal Exchange, untraded at the
close, was last bid at $7,806.5, up from a close of $7,780 on Monday. It hit a
session high of $7,828.75, its highest since Nov. 2. 
    The metal, used in power and construction, has risen by almost 3 percent in
the last two weeks helped by data from top metal consumer China and the United
States pointing to an improving economic picture.
    U.S. consumer confidence rose to a four-and-a-half-year high in November as
consumers became more optimistic about the outlook for the economy, according to
a private sector report. 
    While a gauge of planned U.S. business spending increased by the most in
five months in October, a fourth month of decline in shipments underscored the
damage that fears of tighter fiscal policy next year are inflicting on the
economy. 
    The dollar rose after the U.S. consumer confidence data, and the euro
retreated from a one month high as the deal to rescue Greece was offset by
concerns about the broader euro zone.
    A stronger dollar makes metals priced in the currency more expensive for
holders of other currencies.
    "Growing expectations of an agreement on the new tranche of funds for
Greece, together with signs of economic improvement in the U.S. and China...have
pushed investors to bet on cyclical assets such as base metals in the last few
days," T-Commodity consultant Gianclaudio Torlizzi said in a research note.
    
    CHINA SUBWAY BOOST
    Improving prospects for metals demand, China approved construction of two
city subway projects worth 49 billion yuan ($7.87 billion), which add to the
list of recent railway project approvals aimed at boosting growth in the world's
second biggest economy. 
    China is the world's top consumer of copper, used widely in the construction
and power industries.  
    But expectations of raising copper supply kept prices in check.
    Peru's copper output rose 9.58 percent in September from a year earlier to
113,615 tonnes. 
    Chile's Codelco, the world's top copper producer, reduced the premiums it
will charge to ship metal to clients in China in 2013 by up to $12 a tonne, on
expectations of rising global supply. 
    Three-month aluminium closed at $2,009 per tonne from a last bid of
$1,999.50 on Monday and lead closed at $2,213 from a close of $2,183.
    Three-month tin closed at $21,200 from $20,825 on Monday, zinc
 at $1,993 from $1,982 and nickel at $16,930 from $16,455.
    Indonesia's nickel ore exports recovered in October, as top buyer China
stocked up ahead of winter and more miners resumed production after meeting
tough government rules that hit shipments this year from the world's top
exporter of the metal. 
    
 Metal Prices at 1733 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       353.25       -0.40     -0.11     344.75      2.47
  LME Alum      2005.25       22.25     +1.12    2020.00     -0.73
  LME Cu        7787.25        7.25     +0.09    7600.00      2.46
  LME Lead      2205.25       22.25     +1.02    2034.00      8.42
  LME Nickel   16870.00      415.00     +2.52   18650.00     -9.54
  LME Tin      21170.00      345.00     +1.66   19200.00     10.26
  LME Zinc      1986.50        4.50     +0.23    1845.00      7.67
  SHFE Alu     15395.00       25.00     +0.16   15845.00     -2.84
  SHFE Cu*     56240.00        0.00     +0.00   55360.00      1.59
  SHFE Zin     15155.00       15.00     +0.10   14795.00      2.43
 ** 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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