* Investors bet Washington to clinch deal to avert cliff
* US copper speculators raise net longs to highest since Aug
* LME copper may fall to $7,757 - technicals
By Maytaal Angel and Silvia Antonioli
LONDON, Dec 24 Copper inched down on Monday,
after posting its biggest weekly drop in more than six months,
as the Christmas holiday lull set in across markets and
uncertainty about the U.S. fiscal talks weighed on the outlook
for industrial metals.
Negotiations to avert $600 billion worth of tax hikes and
spending cuts due to take effect in the new year have dragged
on, with some U.S. lawmakers voicing concerns on Sunday that the
country would go over the "fiscal cliff" in nine days.
But most risk assets were little changed on the last trading
week of the year as most global investors bet Washington would
reach an agreement to prevent the world's top economy from
slipping into another recession.
Three-month copper on the London Metal Exchange
traded at $7,801 a tonne in the final ring trade of a
holiday-shortened session, only slightly down from a close
$7,831.50 on Friday.
The metal, used in power and construction, lost nearly 3
percent in the previous week - its steepest weekly drop since
"A majority of people anticipate a deal will be done, even
if bit after the deadline. (Also) macro data has looked more
constructive of late. In that environment, there's a little more
optimism about the outlook (for metals) in the coming months,"
Macquarie analyst Duncan Hobbs said.
Looking further ahead, however, Hobbs warned: "Copper
continues to trade at high prices by historic standards at a
time where people expect the (supply-demand) balance will ease
over the next few years."
Speculators raised their net length in U.S. copper to 24,531
contracts in the week ended Dec. 18, the highest since August
2011, data from the U.S. Commodity Futures Trading Commission
The dollar was down slightly against the euro but up
strongly from last week's eight-month lows as a lack of progress
in U.S. budget talks led investors to the perceived safe haven
of the greenback. A strong dollar makes dollar-priced metals
pricier for non-U.S. investors.
"Monday will likely be quiet as it's a shortened trading
day, but we think there will be some fireworks in the run-up to
year-end, particularly as the situation around the cliff
evolves," RBC Capital Markets said in a note.
Chilean miner Antofagasta has halted development at
its $1.7 billion copper mine Antucoya as it reviews escalating
costs of the project. Peru plans to nearly double its copper
output in the next two years and will not give up on a $5
billion project by Newmont Mining, which has stalled due
to community opposition.
Technical analysis suggested that LME copper could fall to
$7,757 during the day as a weak rebound from last Thursday's low
of $7,735 seems to have ended, Reuters market analyst Wang Tao
Soldering metal tin traded at $23,200 a tonne from
$23,225, while zinc, used in galvanizing, was untraded
in rings but was bid at $2,090 a tonne from a last bid of $2,082
Battery material lead traded at $2,319 from $2,307
close on Friday, aluminium traded at $2,092 from $2,082,
while stainless-steel ingredient nickel traded at
$17,005 from $17,350.
Metal Prices at 1333 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in
Metal Last Change Pct Move End 2011 Ytd Pct
COMEX Cu 355.15 -0.45 -0.13 344.75 3.02
LME Alum 2081.25 -0.75 -0.04 2020.00 3.03
LME Cu 7803.00 -28.50 -0.36 7600.00 2.67
LME Lead 2313.25 6.25 +0.27 2034.00 13.73
LME Nickel 17178.00 -172.00 -0.99 18650.00 -7.89
LME Tin 23125.00 -100.00 -0.43 19200.00 20.44
LME Zinc 2082.25 11.25 +0.54 1845.00 12.86
SHFE Alu 15280.00 20.00 +0.13 15845.00 -3.57
SHFE Cu* 56850.00 110.00 +0.19 55360.00 2.69
SHFE Zin 15490.00 105.00 +0.68 14795.00 4.70
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07