* Lead rises near 1-1/2 year high
* China data points to steady growth revival
* U.S. manufacturing rises at fastest pace in 7 months
By Silvia Antonioli and Rujun Shen
LONDON/SINGAPORE, Jan 2 Copper rose to its highest in more than
two months on Wednesday in a broad financial markets rally after the U.S.
Congress struck a deal to avert a fiscal disaster and on upbeat data from top
metals consumer China.
The United States averted economic calamity on Tuesday when lawmakers
approved a deal to prevent tax hikes and spending cuts that would have pushed
the world's largest economy off a "fiscal cliff" and into
The resolution that came after months of political wrangling sent stocks
higher and boosted industrial metals, which thrive on a better economic outlook,
but weighed on the safe-haven dollar.
Benchmark copper on the London Metal Exchange closed at $8,210 per
tonne, up from $7,929 in the last ring on Monday. It rose to a session high of
$8,255, its highest level since Oct. 18.
"We started off 2013 on a very positive note. The market is thinking the
fiscal cliff being resolved quickly leaves the year open to maybe a
better-than-expected recovery in the U.S. economy," Robin Bhar, an analyst at
Societe Generale, said.
"The other big thing for the metals market is a strong rebound in China that
could be underway; the data is pointing to that. Sentiment is certainly risk-on
and the dollar has taken a back seat because of that, so it should be a pretty
good beginning for financial markets."
A weaker dollar makes commodities priced in the U.S. currency cheaper for
investors holding other currencies.
Global manufacturing activity expanded last month for the first time since
May, supported by solid output gains in China, the United States and Britain, a
business survey showed on Wednesday.
China's official manufacturing purchasing managers' index held steady in
December at 50.6, matching November's seven-month high and adding to evidence
that the world's second-largest economy is headed towards a revival of steady
Technical analysis suggested that LME copper could rise towards $8,140 after
it cleared resistance at $8,063, Reuters market analyst Wang Tao said.
The metal, used in power and construction, rose by more than 4 percent in
2012, following a 21 percent fall in 2011.
Tin was the outstanding winner of the base metals complex last year, rising
almost 22 percent, while lead rose by 15 percent, zinc by 13 percent and
aluminium by 3 percent.
Bucking the trend, stainless steel material nickel lost 9 percent in 2012.
Battery material lead, untraded at the close, was last bid at $2,430
a tonne, up from a last bid of $2,340 on Monday. It hit a session high of
$2,439, its highest level since mid-September 2011.
"Fundamentally, lead is still a pretty balanced market. Stocks are not
excessive, below three weeks' worth of consumption, and we are in a seasonally
strong period, so there is no reason why prices should not stay at these
elevated levels for the next two to three months," Bhar said.
Lead stocks at LME warehouses dropped to 317,700 tonnes, the lowest since
early November. The ratio of cancelled warrants - material earmarked for
delivery - to total stocks rose to a record high of 57 percent.
"We see this market having good room to move higher as our next major target
comes in at $2,517, followed by our ultimate goal of 2011 highs at $2,904," RBC
said in a research note.
"Zinc takes second place in our strongest metal competition as it looks next
closest to challenging 2012 highs."
Three-month zinc closed at $2,141 per tonne, up from Monday's
$2,064. It hit an intra-day high of $2,155, it's highest since February last
Aluminium closed at $2,160 from a last bid of $2,071 on Monday,
while nickel closed at $17,725 from $17,155. Tin, untraded at
the close, was last bid at $24,445, up from Monday's last bid of $23,400.
Metal Prices at 1723 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2012 Ytd Pct
COMEX Cu 372.90 8.15 +2.23 365.25 2.09
LME Alum 2161.00 98.00 +4.75 2073.00 4.25
LME Cu 8194.25 308.25 +3.91 7931.00 3.32
LME Lead 2425.75 90.75 +3.89 2330.00 4.11
LME Nickel 17676.00 476.00 +2.77 17060.00 3.61
LME Tin 24215.00 815.00 +3.48 23400.00 3.48
LME Zinc 2137.25 84.75 +4.13 2080.00 2.75
SHFE Alu 15365.00 20.00 +0.13 15435.00 -0.45
SHFE Cu* 57770.00 190.00 +0.33 57690.00 0.14
SHFE Zin 15520.00 -25.00 -0.16 15625.00 -0.67
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07