* Hopes pinned on European leaders meeting
* U.S. earnings, retail sales data lift equities
* China Sept CPI +1.9 pct yr/yr, in line with forecast
* LME zinc inventories at multi-year high
(Changes dateline, byline, adds quotes, updates prices)
By Veronica Brown
LONDON, Oct 16 Copper prices were lifted from
one month lows on Tuesday, taking a lead from a firmer tone in
share markets and the euro after a stronger than expected batch
of U.S. data and earnings.
Investors were also buoyed by hopes that a meeting of
European leaders later in the week might advance plans to tackle
Spain and Greece's debts.
Three-month copper on the London Metal Exchange was
0.7 percent higher at $8,149 per tonne, having fallen to its
lowest level since mid September in the previous session.
Volumes were reduced as market participants attended events
organised for London Metal Exchange dinner week.
"Market positioning is relatively light and, whilst the
recent economic data out of the U.S. has been good, it is firmer
evidence of a turn in China that will drive base metals further
from here," Marex Spectron macro strategist Guy Wolf said.
China's consumer price inflation eased to 1.9 percent in
September from August's 2.0 percent, while producer prices
dropped 3.6 percent from a year earlier. Both numbers matched
the forecast of economists polled by Reuters.
Analysts say it is hard to predict whether China will be
easing policy soon after benign inflation in September showed it
has the scope to do so, although evidence is mounting that
earlier pro-growth measures are gaining traction, reducing the
pressure on policymakers to act as a once-a-decade leadership
WEAK COPPER CONSUMER DEMAND
Asia-based traders and analysts said consumer demand for
copper in China remained weak despite a drop in the discount of
spot copper over the ShFE front-month November contract
to 100 yuan from as much as 150 yuan on Monday.
A Shanghai-based trader attributed the change mainly to a
steeper fall in front-month futures' value in recent days,
rather than a surge in spot copper demand.
In another sign of sluggish spot demand, the ShFE
front-to-third month spread switched to a contango on Monday,
after being in backwardation since late July.
Looking forward, analysts moderated downbeat views of copper
prices in the final quarter of this year and in 2013 after
central bank stimulus, but most expect uncertainty over China to
prevent a quick return to bullishness, a Reuters poll showed.
Zinc snapped six sessions of losses, last quoted up
0.1 percent at $1,917.75.
"It's a technical rebound after LME zinc fell through its
60-day Moving Average yesterday," said Minmetals Futures analyst
But analysts said zinc prices were still under pressure from
high LME inventories, which are at their highest in at least
four years. MZNSTX-TOTAL
Goldman Sachs said in a note on Monday that the global zinc
market would see a surplus of 393,000 tonnes in 2012 and 181,000
tonnes in 2013.
Aluminium was broadly flat at $1,961.75, while tin
was up 0.7 percent at $21,250.
Jiangxi Copper Company Ltd , the top
copper producer in China, plans to cut domestic sales and
increase exports of the metal next year to take advantage of
strong copper prices on the London Metal Exchange, a senior
(Additonal reporting by Carrie Ho in Shanghai,; Editing by