* Hopes for China policy easing fade, weak data in focus
* LME stock jump by 12,000 tonnes, near decade high
* Indian court to rule on Sterlite smelter restart
* Workers trapped in Freeport tunnel collapse
By Maytaal Angel
LONDON, May 14 Copper fell nearly 2 percent on
Tuesday hit by a sharp rise in London Metal Exchange (LME)
stocks and as markets digested Monday's softer-than-expected
factory growth data from top copper consumer China.
Daily data out earlier showed LME stocks rose by 12,000
tonnes to 618,700 tonnes, edging back towards a recent peak of
621,600, which was the highest in almost a decade.
Cancelled warrants or orders to take delivery of copper from
LME warehouses remain elevated, however.
"It's likely copper will head towards $7,500 in the very
short term, inventories will trickle down, but I don't think
(the rebound) has got that much endurance," said UBS analyst
"We still expect a surplus this year even if demand in China
is a little stronger than initially expected. Q1 results for
production out of copper mines, most companies reiterated
guidance for copper with exception of Bingham Canyon."
Three-month copper on the London Metal Exchange
eased 1.83 percent to $7,275.50 a tonne by 0909 GMT, reversing
gains of half a percent in the previous session.
Copper hit its highest in nearly a month last Wednesday at
$7,480 a tonne. It has clawed back around nine percent from
18-month lows below $6,800 touched on April 23, but is still
down almost 7 percent for the year.
Weighing on the metal, data out on Monday showed China's
factory output growth was surprisingly feeble in April and
fixed-asset investment slowed, rekindling concerns that a
nascent recovery is stalling.
Meanwhile, hopes are starting to fade that the weak data
from China will up the likelihood of monetary policy easing.
"The problem is, they seem to be much more comfortable with
lower growth than they were in the past," said analyst Dan Smith
of Standard Chartered in London.
With China in focus, copper was little moved by news that
output at euro zone factories rose much more strongly than
expected in March, to show a second consecutive monthly increase
and the highest jump in 20 months.
In industry news, Rio Tinto Ltd is looking
for concentrate for its Kennecott copper smelter in Bingham
Canyon, Utah after a landslide at its nearby mine, sources said,
but traders said the impact is limited as India's biggest
smelter is shut on pollution concerns.
An Indian court is set to rule later on Tuesday on whether
the smelter, owned by Sterlite Industries, can restart
after it was closed in March.
The market is also waiting to hear whether an accident at
the Indonesian unit of Freeport-McMoRan Copper & Gold Inc
will affect production at the world's second-largest
Metal Prices at 0925 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
COMEX Cu 330.60 -5.40 -1.61 365.25 -9.49
LME Alum 1854.50 -12.50 -0.67 2073.00 -10.54
LME Cu 7274.00 -141.00 -1.90 7931.00 -8.28
LME Lead 1993.00 -15.00 -0.75 2330.00 -14.46
LME Nickel 15254.00 -46.00 -0.30 17060.00 -10.59
LME Tin 20770.00 -130.00 -0.62 23400.00 -11.24
LME Zinc 1847.50 -14.50 -0.78 2080.00 -11.18
SHFE Alu 14565.00 -35.00 -0.24 15435.00 -5.64
SHFE Cu* 52920.00 -620.00 -1.16 57690.00 -8.27
SHFE Zin 14450.00 -100.00 -0.69 15625.00 -7.52