* Money managers trim net short positions for third
* ShFE markets closed until Thursday
* Dollar dips; European shares rise after Italy names
By Maytaal Angel and Harpreet Bhal
LONDON, April 29 Copper rose on Monday,
extending a recovery from 1-1/2 year lows hit last week
supported by hopes for more U.S. and European central bank
monetary easing and on signs of life in the physical markets.
Also helping copper, European shares rose after a coalition
government was named in Italy, ending a two-month-old political
impasse. The dollar fell versus the euro meanwhile, making
dollar-priced metals cheaper for non-U.S. investors.
Benchmark three-month copper on the London Metal Exchange
ended at $7,153.50 a tonne, up from Friday's close of
China's markets will be closed until Thursday for Labour Day
Copper recorded a gain of 0.5 percent last week, its biggest
since early February, as investors piled in after prices hit a
year-and-a-half low of $6,762.25 a tonne. Prices are down some
11 percent this year.
"The market is a little bit too pessimistic on base metals.
OK, inflation is decelerating, leading economic indicators are
edging lower again, but in copper something is starting to
improve," said Credit Suisse analyst Tobias Merath.
"Inventories in China (are) starting to come off, LME
cancelled warrants have spiked, spot premiums are rising,
especially in China, and the arbitrage (import) window is open,"
Daily data showed LME stocks fell by 1,950 tonnes to 617,650
tonnes, though they remain near their highest in nearly a
decade. In Shanghai, however, data last week showed SHFE copper
stocks fell by 2.9 percent week on week to 217,180 tonnes, their
lowest since early March.
Speculation is rife that the European Central Bank (ECB)
will cut interest rates at its policy meeting on Thursday given
the dreary run of economic news from the region.
The U.S. Federal Reserve also meets this week and is widely
expected to keep its current pace of bond buying at $85 billion
a month. The policy-setting Federal Open Market Committee will
announce its decision at 1815 GMT on Wednesday.
The rate cut and bond buying hopes come amid a string of
poor economic data. China's economic recovery unexpectedly
stumbled in the first three months of 2013, while U.S. growth
expanded at a weaker than expected 2.5 percent.
"This is the third consecutive day that we are seeing
triple-digit moves in copper, but despite today's advance, the
downtrend remains intact and will not be taken out unless we get
above $7,450 (a tonne)," said Ed Meir, analyst at INTL FCStone.
Signalling some investors at least have become less bearish
on the metal's prospects by contrast, hedge funds and money
managers decreased their net shorts in copper futures and
options for a third week, the CFTC's Commitments of Traders
India's largest copper smelter will remain shut as a local
environmental court transferred a case over complaints about
emissions to New Delhi, extending a month-long closure.
The smelter, run by Sterlite Industries was closed
on March 30, sending shockwaves through the copper market by
pushing about 3,000 tonnes per day of concentrates onto the
market and sending fees to process to a five-month high in Asia.
Soldering metal tin ended at $20,895 from $20,775,
while zinc, used in galvanising, closed at $1,907 from
Battery material lead ended at $2,044 from a close
of $2,037 on Friday, aluminium closed at $1,899 from
$1,878, while nickel ended at $15,500 a tonne from
Gains in nickel, the worst performing LME metal this year,
were capped by news that Indonesia expects the first stage of a
$1-billion nickel pig iron smelter in Central Sulawesi to start
operations by the end of 2014.