METALS-Copper down slightly on U.S. fiscal cliff uncertainty
* Macro data improves but no fundamentals progress yet-analyst * Nearby tightness in aluminium intensifies * Coming up: New York Fed survey for Dec; 1330 GMT By Silvia Antonioli and Stephen Eisenhammer LONDON, Dec 17 (Reuters) - Copper edged lower on Monday weighed by uncertainty over the ability of the United States to avert a "fiscal cliff" of tax increases and spending cuts, which could slow growth and hit global metals demand. Benchmark copper on the London Metals Exchange traded up 0.4 percent at $8,065 in official rings, from $8,065 at Friday's close. In the first real movement in budget deficit negotiations to avoid the fiscal, U.S. House of Representatives Speaker, John Boehner, offered to accept a tax rate increase for Americans earning over $1 million. "The market is still consolidating in a very narrow range because people are waiting for fundamental signals to kick off; we still haven't seen that. It will probably continue like this until there is an agreement in the U.S. to avoid the fiscal cliff," VTB Capital analyst Andrey Kryuchenkov. The metals market, however, found some support in Friday's data pointing to growth in both China's vast manufacturing sector and U.S. factories activity but this still has to translate in an improvement in metals fundamentals. "We have got to see the stock shrinking in China, we have got to see premiums spiking, a narrowing contango at the front end of the curve in London and China and that will not happen until the start of next year anyway, so the rest of the year will be dominated by fiscal cliff news," Kryuchenkov said. Solid growth from the United States will be crucial to reviving the world economy and driving demand for commodities in 2013, particularly with a debt crisis still grinding on in the euro zone. Meanwhile the world's second largest economy, China, will maintain steady economic polices in 2013, enabling it to manoeuvre in the face of global risks while deepening reforms to support long-term growth, the official Xinhua news agency said on Sunday. China, which is the world's largest consumer of industrial metals, buys about 40 percent of global copper supply. Investors are now focusing on NY Fed manufacturing data later this session for further clues on the state of the U.S. economy. ALUMINIUM TIGHTNESS A lack of available aluminium supply towards year-end has propelled its cash price to a $22 premium against three-month prices, the highest in more than 18 months. Three-month aluminium was at $2,121 from a last bid of $2,122 on Friday. Tightness is being driven by a supply shortage over December-January where there are still some holders of short positions that cannot find metal to deliver. December aluminium traded at a $40 premium against January on Friday, ahead of the December prompt, or contract expiry next week. "We are approaching the December prompt and many are now wondering what will be the final outcome next Tuesday at noon," metals broker Triland said in a note. Although LME aluminium stocks have hit successive record highs around 5.2 million tonnes over the past month, much of the metal is tied up in long warehouse queues and is unavailable to the market. In other metals, zinc, used to galvanize steel, did not trade in official rings but was bid at $2,079, down 0.5 percent, from $2,090 at Friday's close, while battery material lead was down 0.4 percent at $2,286 from $2,296. Tin was up 1 percent at $23,375, from $23,150, and stainless steel ingredient nickel was 1.3 percent lower at $17,650, from $17,875. Metal Prices at 1306 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 364.95 -2.25 -0.61 344.75 5.86 LME Alum 2110.00 -16.00 -0.75 2020.00 4.46 LME Cu 8036.25 -28.75 -0.36 7600.00 5.74 LME Lead 2285.25 -10.75 -0.47 2034.00 12.35 LME Nickel 17701.00 -174.00 -0.97 18650.00 -5.09 LME Tin 23250.00 100.00 +0.43 19200.00 21.09 LME Zinc 2077.50 -12.50 -0.60 1845.00 12.60 SHFE Alu 15300.00 -15.00 -0.10 15845.00 -3.44 SHFE Cu* 57970.00 240.00 +0.42 55360.00 4.71 SHFE Zin 15510.00 60.00 +0.39 14795.00 4.83 ** 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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