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METALS-Copper above 5-week low as Syria worry eases, dollar falls
September 16, 2013 / 2:37 PM / 4 years ago

METALS-Copper above 5-week low as Syria worry eases, dollar falls

* Copper rises from Aug 8 lows hit on Friday
    * Russia-U.S. deal on Syria lifts risk appetite
    * Dollar falls after Summers withdraws from Fed chair
race

 (Adds closing prices)
    By Susan Thomas
    LONDON, Sept 16 (Reuters) - Copper lifted on Monday from
the five-week low hit on Friday as investor appetite for
risk improved on expectations of a diplomatic solution to
the Syria crisis and the dollar fell.
    Signs of progress in Syria following a Russia-brokered
deal aimed at averting U.S. military action helped lift the
prices of assets such as copper and shares. 
    The dollar fell to a four-week low against a basket of 
currencies after Lawrence Summers withdrew his candidacy for
chairman of the U.S. Federal Reserve. 
    A weaker dollar supports copper as it typically helps
boost demand for dollar-denominated assets by making them
cheaper for holders of other currencies.
    Summers is perceived by markets as hawkish, and his
decision could leave Janet Yellen, a policy dove, as front
runner for the job. Investors wagered that U.S. monetary
policy would likely stay easier for longer under Yellen.
 
    Three-month copper on the London Metal Exchange 
ended up 0.62 percent at $7,085 a tonne. It dropped to a low
of $7,024 a tonne on Friday, its weakest since Aug. 8.
    "Firstly, the Syrian crisis has receded further into the
background, so that worry has moved away and has helped
support copper," BNP Paribas analyst Stephen Briggs said. 
    "Secondly, there is the perception that the other
possible Fed candidates will be more likely to continue with
quantitative easing, and through that the dollar has
weakened which is also a factor in supporting the base
metals prices." 
    Copper is up around 7 percent from three-year lows hit
in late June, underpinned by improving sentiment on global
growth. Recent data has boosted optimism about demand in
China, which accounts for 40 percent of global copper
consumption.
    But copper has failed to make headway above $7,420 a
tonne, the top-end of a recent band hit in mid-August. 
    A break out of this band is unlikely ahead of a Fed
policy meeting on Tuesday and Wednesday after which it is
expected to announce a trimming of its bond buying
programme, analysts said.
    "With (the) FOMC meeting the main focus of the wider
global markets, the (base metals) complex is likely to
continue drifting sideways until some clarity emerges on the
timing and scale of any tapering," Standard Bank said in a
research note.
    U.S. data on Monday was mixed, leaving the outlook for
relatively mild Fed tapering intact. 
    U.S. industrial production rose in August thanks to a 
bounce in motor vehicle assembly, though the pace of growth
in New York state's manufacturing sector unexpectedly slowed
in September.  
    Benchmark lead ended down 0.82 percent at $2,053
per tonne, after falling 2.3 percent on Friday to a six-week
low, weighed down by inventories rising by nearly 30 percent
in one day. 
    Inventories <0#MPBSTX-LOC> of the metal shot up by
49,475 tonnes at LME-registered warehouses in the Dutch port
of Vlissingen in one day last week. It was the biggest daily
rise in lead stocks since 1970, LME data showed on Friday.
    Benchmark tin ended down 0.11 percent at $22,875
per tonne, continuing to drift off a more-than-five-month
high hit last week on worries over supply from Indonesia.
    "(Tin) doesn't smack of a metal in panic about
availability following export disruptions in Indonesia. The
nearby spreads have also eased significantly in the past
week or so," Standard Bank said in a note.
 Metal Prices at 1620 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
 
  move
  COMEX Cu         3.22        0.02     +0.66     365.25   
 -99.12
  LME Alum      1781.50       -8.50     -0.47    2073.00   
 -14.06
  LME Cu        7090.00       49.00     +0.70    7931.00   
 -10.60
  LME Lead      2056.75      -13.25     -0.64    2330.00   
 -11.73
  LME Nickel   13870.00       -5.00     -0.04   17060.00   
 -18.70
  LME Tin      22805.00      -95.00     -0.41   23400.00    
 -2.54
  LME Zinc      1865.00       -4.00     -0.21    2080.00   
 -10.34
  SHFE Alu     14195.00      -20.00     -0.14   15435.00    
 -8.03
  SHFE Cu*     51180.00        0.00     +0.00   57690.00   
 -11.28
  SHFE Zin     14655.00      -80.00     -0.54   15625.00    
 -6.21
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07
    
    

 (Additional reporting by Naveen Thukral in Singapore;
editing by William Hardy)

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