(Removes incorrect reference to copper price falls of more than 1 pct on
* Euro drops versus dollar on Merkel comments
* Global growth fears, China demand worries cap gains
* Coming up: U.S. housing starts at 1230 GMT
By Harpreet Bhal
LONDON, July 18 Copper steadied on Wednesday, but gains were
limited following no indication of further stimulus measures from the U.S.
Federal Reserve, with concerns about Europe's debt crisis and metals demand also
weighing on prices.
Three-month copper on the London Metal Exchange traded flat at
$7,595 in official rings.
Keeping prices soft on Wednesday were falls in the euro versus the dollar,
with traders citing a media report that quoted German Chancellor Angela Merkel
as saying she could not be sure the European project would work.
A strong dollar makes commodities priced in the U.S. unit more expensive for
holders of other currencies.
Lingering worries about a slowdown in the global economy and Europe's
persistent debt crisis kept investors cautious. In addition, China - the world's
biggest copper consumer - faces its slowest growth in three years, raising
concerns about the outlook for demand.
"Everyone is concerned about what is going on in Europe and also about the
U.S. where economic numbers have been disappointing," said Nic Brown, head of
commodities research at Natixis.
"And although we continue to like the look of the second half of the year in
China, there is no denying that second quarter growth there was horrid."
In his testimony on Tuesday, Chairman Ben Bernanke said the Federal Reserve
stands ready to offer more stimulus as needed, leaving the door open for further
monetary easing but stopped short of signalling action in the near term.
"It appears that the Fed is prepared to do whatever is necessary and it
seems to be unhappy that the politicians are making no progress in solving the
fiscal problems until after the (U.S.) election. Bernanke acknowledges that it
may be necessary for the Fed to step in at some point," Brown said.
On the European front, Greek coalition leaders agreed to meet next week to
hammer out almost 12 billion euros worth of austerity cuts demanded by the
near-bankrupt country's lenders after a deal proved elusive at an initial round
of talks on Wednesday.
Trading volumes were thinned by Europe's summer season, where much of the
industry shuts down for a break. Highlighting the lack of conviction in the
market, open interest in copper is its lowest since July 2009. MCU-OI-TOT
Copper prices are trading 0.8 percent lower so far this month, having shed 9
percent in the second quarter as it hit a 2012 low of $7,219.50 a tonne in June.
In China's physical markets, traders are handling less base metals volumes
than the same time last year, one Shanghai-based physical trader noted.
"Consumer demand for base metals has been hit by a sluggish business climate
in China, while Beijing's recent injections of liquidity into the system have
also reduced the need for people to buy base metals as collateral for
financing," he said.
Highlighting mounting concerns about China's sagging economy, Premier Wen
Jiabao said the country's job market could turn for the worse and the government
needed to step up efforts to create more jobs.
In industry news, mining giant BHP Billiton reported annual
copper output growth of 15 percent in the June quarter.
In other metals traded, battery material lead traded at $1,883 in
official rings, from Tuesday's close of $1,893, while zinc, used in
galvanizing, was at $1,860 from $1,865.
Stainless-steel ingredient nickel was untraded in rings, but bid at
$16,040 from Tuesday's close of $16,100. Soldering metal tin was also
untraded in official rings, but bid at $18,700 from $18,895 and aluminium
, also untraded in rings, was bid at $1,895 from $1,904.
Metal Prices at 1211 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2011 Ytd Pct
COMEX Cu 344.70 -0.75 -0.22 344.75 -0.01
LME Alum 1894.25 -9.75 -0.51 2020.00 -6.23
LME Cu 7594.00 -1.00 -0.01 7600.00 -0.08
LME Lead 1879.50 -13.50 -0.71 2034.00 -7.60
LME Nickel 15981.00 -119.00 -0.74 18650.00 -14.31
LME Tin 18680.00 -215.00 -1.14 19200.00 -2.71
LME Zinc 1855.75 -9.25 -0.50 1845.00 0.58
SHFE Alu 15565.00 -15.00 -0.10 15845.00 -1.77
SHFE Cu* 55820.00 -100.00 -0.18 55360.00 0.83
SHFE Zin 14785.00 -15.00 -0.10 14795.00 -0.07
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
(Additional reporting by Carrie Ho in Shanghai; editing by James Jukwey and