US copper futures open down as supply issues weigh
NEW YORK, Aug 28 (Reuters) - U.S. copper futures held at slightly lower levels early Thursday as another large increase in London warehouse stocks and rumors of large arrivals in Shanghai dampened sentiment, analysts said.
NOTE: For detailed report, click on [MET/L].
* Most-active copper for December delivery HGZ8 was trading down 1.30 cents at $3.4320 a lb by 10:26 a.m. EDT (1426 GMT) on the New York Mercantile Exchange's COMEX division.
* The morning range was from $3.4010 to $3.4685.
* The now spot September contract HGU8 was off 1.40 cents at $3.4575, dealing in a $3.4245-$3.4950 morning band.
* COMEX estimated futures volume at 7,935 lots by 9 a.m.
* Copper seen detaching itself early Thursday from a firmer precious metals complex, another higher move in crude oil futures, and a weaker U.S. dollar -- previous supportive influences for the red metal.
* "Unusually, metals are looking past these items and seem to be focusing, instead, on rising LME (London Metal Exchange) stocks. Prices are also being weighed down by reports that up to 6,000 tonnes of refined copper have arrived in Shanghai, and could end up on the exchange if homes are not found for it." - MF Global metals analyst Edward Meir.
* Still, with spot premiums at over 700 Yuan above the front-month Shanghai contract and a still unfavorable arbitrage between London copper prices and Shanghai suggested the arrival would not be as severe to SHFE stockpiles.
* Shanghai exchange warehouse stocks, at 21,796 tonnes last week, or about two days of Chinese daily consumption, are tight, despite the almost-daily builds in LME warehouses.
* LME copper stocks tacked on another 2,200 tonnes on Thursday, bringing total inventory levels to 170,050 tonnes -- their highest level in seven-months.
* COMEX copper stocks were unchanged at 5,390 short tons on Wednesday.
* Copper fails to react strongly to economic data showing the U.S. economy expanded at a stronger-than-first-reported 3.3 percent annual rate in the second quarter. [ID:nN27490755]
* In a separate report, the Labor Department said initial claims for state unemployment insurance benefits declined to a seasonally adjusted 425,000 in the week ended Aug. 23, from a revised 435,000 the prior week -- the lowest reading since the week of July 19.
* In industry news, the Democratic Republic of Congo wants a bigger stake the Tenke Fungurume copper-cobalt project, owned by Freeport-McMoRan (FCX.N) and Lundin Mining (LUN.TO), Deputy Mines Minister Victor Kasongo said on Thursday. [ID:nSAB019976]
* LME copper for delivery in three-months MCU3 was last at $7,617 a tonne, compared with the late Wednesday quote at $7,650/7,655. (Reporting by Chris Kelly, editing by Matthew Lewis)
