* China reaffirms 7.5 pct growth target
* Shanghai copper premiums slip
* U.S. May housing starts and building permits fall
(Recasts, adds closing prices, details)
By Harpreet Bhal
LONDON, June 17 Copper edged up on Tuesday as
China's affirmation of economic growth targets and expectations
of further stimulus measures reassured investors, helping them
shrug off weak housing data from the United States.
Three-month LME copper ended at $6,705 a tonne, up
0.22 percent from the previous session's close.
China is confident it will hit its growth target of 7.5
percent this year, Chinese Premier Li Keqiang said, adding the
government was ready to adjust policy to ensure it does. Beijing
also said a cut in the reserve requirement ratio that banks must
hold could also apply to big state banks.
On the downside, data out earlier showed U.S. housing starts
and building permits fell more than expected in May, suggesting
recovery in the housing sector - a big copper consumer - will be
Still, U.S. inflation data pointed to a steady firming of
inflation pressures, reassuring investors about the world's
largest economy and allowing them to remained firmly focussed on
China, the world's top copper consumer. [ID;nL2N0OY0FE]
"China has cut its reserve requirement ratios for the first
time in a long while and that is monetary easing Chinese style,"
said Nic Brown, head of commodities research at Natixis.
"There is potentially more of that and other forms of
stimulus that can be rolled out of necessary in order for the
government's growth targets to be achieved. That has helped the
Economic growth in China has been dented by weakness in its
property markets, which targeted stimulus should help put back
on track, said Helen Lau, a senior mining analyst at UOB-Kay
Hian Securities in Hong Kong.
Data on Chinese house prices for May is due on Wednesday.
"The government will continue to fine-tune to provide enough
financing for smaller enterprises and to help support the
overall economy," she said.
"These news headlines have supported copper prices in terms
of sentiment, but I do not see any real improvement in
fundamentals, especially with seasonal demand weakness coming
in," she said.
Prices for copper rebounded from a 1-1/2 month low of
$6,614.75 hit last week following news that Chinese authorities
are investigating the use of cargoes of metal as collateral in
financing deals in China. The move had raised fears about trade
in the metal.
"Worries about the Qingdao port probe have calmed down a
little now that is has become clear that the investigation is
only targeted at double pledging of collateral," Brown said.
"It is not a signal that metal financing trade will dry out.
It is just that you need to play by the rules. Metal financing
is an integral part of the copper trade... we will return to
some sort of business as normal."
Copper premiums in Shanghai bonded warehouses fell, given
tighter credit in the wake of a probe into metals financing in
China's Qingdao port, edging back by $2.5 to $65-$85, down by
nearly half from $110-125 two weeks ago. (www.shmet.com/)
Indonesia and U.S. miner Freeport-McMoRan Copper & Gold Inc
have agreed on the basic framework for contract
renegotiations for the world's fifth-largest copper mine, a
further step in efforts to resume copper exports.
Indonesia's biggest copper producer and fellow miner Newmont
Mining Corp halted copper concentrate shipments in
January when the government introduced new mining rules,
including an escalating export tax that the two firms say
violates their mining contracts.
LME nickel closed 2.52 percent higher at $19,120 a
tonne, aluminium closed 0.05 percent lower at $1,852 a
tonne and tin closed at $22,550, up 0.45 percent.
Lead closed 0.62 percent higher at $2,119 a tonne
while zinc rose 0.97 percent to end at $2,124.
Three-month LME copper
Most active ShFE copper
Three-month LME aluminium
Most active ShFE aluminium
Three-month LME zinc
Most active ShFE zinc
Three-month LME lead
Most active ShFE lead
Three-month LME nickel
Three-month LME tin
(Additional reporting by Melanie Burton in Sydney and Maytaal
Angel in London, editing by Louise Heavens and William Hardy)