* Fresh Shanghai shorts, bonded stock buys paint mixed
* U.S. markets shut for President's day holiday on Monday
* Coming Up: ECB president testifies in European Parliament;
By Melanie Burton
SINGAPORE, Feb 18 Shanghai copper fell to a
three-week low on Monday as traders returning from a week-long
break in China played catch up with recent losses in London
prices, while signs of a weaker global growth also hurt
There were mixed signals from China as the top metals
consumer returned from its Lunar New Year break on Monday --
Shanghai copper futures fell more than 1 percent, tracking a
similar loss in London copper last week, but Shanghai-based
traders picked up bonded stock.
"China's overall economy is still strong, so the appetite
for base metals after Chinese New Year will gradually pick up,"
said Helen Lau, senior commodity analyst at UOB-Kay Hian in Hong
"People should not view consolidation as the start of a
weaker trend from here -- instead we would recommend it as a
chance to get in," Lau said, adding that strong growth in the
China's construction sector would underpin metals this year.
China accounts for 40 percent of refined copper demand.
The most-traded May copper contract on the Shanghai Futures
Exchange dropped 1.39 percent to finish at 58,900 yuan
($9,500) a tonne. It earlier hit its lowest since Jan. 30 at
58,870 yuan a tonne.
Three-month copper on the London Metal Exchange also
pegged losses, but less than that for the metal in Shanghai. It
dropped 0.6 percent to $8,158 a tonne by 0711 GMT, off a low of
$8,155.25 a tonne hit earlier in the session -- also its lowest
since Jan. 30.
London copper hit a 4-month-peak of $8,346 in early February
but has since struggled to gain traction. Traders hope that
China's return to the market this week could help set a floor
But worries about the global economy and its possible impact
on commodities demand promises to restrict price gains.
The Group of 20 nations declared on Saturday there would be
no currency war and deferred plans to set new debt-cutting
targets, underlining broad concern about the fragile state of
the world economy.
Also continuing to drag on metals prices was news that the
euro zone slipped deeper than expected into recession in the
last three months of 2012 after its largest economies, Germany
and France, shrank at the end of a wretched year for the region.
Adding to the gloom was data showing U.S. manufacturing got
off to a weak start as motor vehicle output tumbled in January.
But, a regional rebound in factory activity suggested any
setback would be temporary.
BONDED STOCK BUYS AND FRESH SHANGHAI SHORTS
The China copper demand picture was mixed.
Traders reported purchases of the metal from bonded Shanghai
inventories which are teetering near record highs above 1
million tonnes but they also reported selling of copper futures
and fresh shorts.
"Many Chinese were long or reluctant to short in pre-Lunar
New Year trade as we've seen westerners pulling the market
higher to squeeze Chinese shorts in last few years," a
Shanghai-based trader said.
"Now, bears are more confident to short on the almost
unchanged price during the holiday," he added.
Another trader said that a comfortable market contango --
where futures prices are higher than front month prices -- had
fuelled demand for physical copper for financing.
Prices for bonded copper edged up around $5 to $55 from
before the break, the traders said.
Base metals prices at 0711 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8158.00 -49.00 -0.60 2.89
SHFE CU FUT MAY3 58900 -830 -1.39 2.12
HG COPPER MAR3 370.50 -3.20 -0.86 1.44
LME Alum 2145.50 -21.50 -0.99 3.60
SHFE AL FUT MAY3 15140 -70 -0.46 -1.34
LME Zinc 2161.50 -13.50 -0.62 4.75
SHFE ZN FUT MAY3 15750 205 +1.32 1.32
LME Nickel 17994.00 -381.00 -2.07 4.89
LME Lead 2425.00 -8.00 -0.33 3.63
SHFE PB FUT 15465.00 -30.00 -0.19 1.41
LME Tin 24715.00 -85.00 -0.34 5.62
LME/Shanghai arb^ 790
Shanghai and COMEX contracts show most active months