* Tin seen boosted in H2 on Indonesia regulation
* Copper to remain under pressure as supply rises
* U.S. consumer spending rebounds in May
By Silvia Antonioli and Eric Onstad
LONDON/SINGAPORE, June 27 Copper steadied on Thursday after a 1
percent loss in the previous session, as worries over China's credit crunch
eased and on expectations that the U.S. and EU central banks will not rush to
reduce their stimulus programmes.
Benchmark copper on the London Metal Exchange ended the day little
changed, closing $5 firmer at $6,740 a tonne. The metal, used in power and
construction, has lost almost 15 percent this year.
Volumes were down as some investors squared positions ahead of the end of
the quarter and half-year this week. Copper volume was under 18,000 lots at the
end of open outcry trading compared with total daily volumes of about 25,000 to
30,000 earlier in the week.
In top metals consumer China, stocks clawed back some of their recent heavy
losses and cash markets steadied, but gains were capped by concerns that last
week's severe cash crunch was ushering in a period of tougher funding conditions
and slower economic growth.
Demand from China accounts for about 40 percent of global copper
"For industrial metals, China is in the driving seat and the story of the
credit crunch is a bit of a problem," Credit Suisse analyst Tobias Merath said.
"Today the situation has improved a bit but we don't expect any major
rebound; we don't see the fundamentals for that, with liquidity problems in
China, forward-looking indicators not looking too well and a lot more supply
coming in the metals markets."
A downward revision on Wednesday of U.S. economic growth estimates for the
first quarter helped support markets by easing worries that the Federal Reserve
might soon curb the massive monetary stimulus that has boosted commodity prices.
On Thursday, U.S. data showed consumer spending rebounded in May and new
applications for unemployment benefits fell last week, suggesting the economy
remained on a moderate growth path.
In the longer term, copper is expected to remain under pressure from slowing
growth in China and expectations of a bigger global surplus.
"We remain bearish on copper," said Joyce Liu, an investment analyst at
Phillip Futures in Singapore.
"The market was supported by talk of output disruptions, but now producers
are ramping up supplies at a time when there is excess supply in the market."
Grasberg in Indonesia, the world's No. 2 copper mine, has reopened six weeks
after a deadly tunnel collapse halted operations. An Indian smelter is also back
on line after having been shut.
In other metals, three-month aluminium closed down 0.4 percent at
$1,764.50 a tonne.
"Aluminium has moved below key support at $1,805 last week - this level may
now provide resistance," analyst Walter de Wet at Standard Bank said in a note.
China has increased orders for spot shipments of aluminium in the past week
as prices in the international market have fallen close to four-year lows,
dipping below the price of locally produced metal.
The price of tin should get a boost in the second half of the year due to
export rules in major producer Indonesia, Commerzbank said in a note.
"The new regulations for Indonesian tin exports (higher quality standards),
due to come into effect from 1 July, are likely to cause exports from this
Southeast Asian country to decline noticeably in the second half of the year,"
it said. "The tin price is making a renewed attempt to take the $20,000 per
Tin, mainly used for solder, came off its session highs to end the
day up 0.4 percent at $19,770 a tonne.
Battery material lead ended 1.0 percent higher at $2,052 a tonne
while zinc added 0.65 percent to $1,850 and nickel climbed 1.8
percent to $13,855.