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METALS-LME copper up for 4th session; German ruling, U.S. Fed eyed
September 12, 2012 / 5:30 AM / 5 years ago

METALS-LME copper up for 4th session; German ruling, U.S. Fed eyed

* LME copper up for 4th session, hovers at four-month high
    * Shanghai copper weighed down by still-sluggish
fundamentals
    * ShFE Oct copper jumps over 5 pct after going limit-up on
Tuesday
    * Investors eye Federal Reserve meeting for QE3
    * Coming up: Germany's court decision on euro zone rescue
fund 0800 GMT


    By Carrie Ho
    SHANGHAI, Sept 12 (Reuters) - London copper edged higher on
Wednesday, on track to post a fourth session of gains on hopes
that the U.S. Federal Reserve might announce another round of
quantitative easing this week and on bets that a German court
ruling on the euro zone's rescue fund will be passed.
    But gains may be capped by fears that prices have risen too
high, considering that downstream demand for copper in top
consumer China remains sluggish.
    Three-month copper on the London Metal Exchange had
edged up just $1 to $8,091 per tonne by 0711 GMT, after rising
0.3 percent on Tuesday. 
    But the most active December copper contract on the Shanghai
Futures Exchange edged down 0.1 percent to 58,290 yuan
($9,200) per tonne.
    "Despite recent optimism over stimulus programmes by major
economies, investors are getting a little panicky at these high
copper prices. Copper demand by downstream industries in China
is still weak, after all," said CIFCO Futures analyst Zhou Jie.
    LME copper prices have already risen 6.4 percent this month,
chalking most of the gains on Sept. 7 after China, the world's
top copper consumer, approved about $150 billion-worth of
infrastructure projects.
    Profit-taking by large investors during the session may have
weighed on copper prices, traders said, adding that these
investors were also responsible for the large volatility in the
ShFE October copper contract over the past few days. 
    "Today's price fall in copper seems like the result of
cross-contract arbitrage trading by a few large investors. They
were probably the ones who pushed the ShFE October copper
contract to its daily limit up yesterday," said a Shanghai-based
trader. "Prices of the ShFE December and LME copper contracts
probably fell after they exited their positions there." 
    ShFE October copper closed the session more than 5 percent
higher. The contract ended down 4.3 percent on Tuesday after
trading was briefly halted when prices were limit-up.
    In Europe, legal experts polled by Reuters unanimously
expected Germany's top court to approve the euro zone's new
bailout fund and budget rules next week, but they also said the
court would impose tough conditions limiting Berlin's
flexibility on future rescues. 
    With the Fed starting a two-day policy meeting later in the
session, some investors are hopeful that the U.S. central bank
will launch more easing policies this week, although others are
less optimistic. 
    Overall risk appetite was also supported by comments from
China Premier Wen Jiabao, who said China was on track to meet
this year's target for economic growth and, if needed, the
government could utilise a 100 billion yuan fiscal stability
fund to boost growth. 
    
WINNING STREAK
    LME aluminium edged up 0.2 percent and is on track
to post a ninth session of gains, buoyed by recent news of
producers outside China cutting production, analysts said. 
    The contract has jumped 14 percent since hitting the year's
low of $1,827.25 per tonne on Aug. 16.
    "Like other base metals, LME aluminium has risen on hopes of
more stimulus programmes by the U.S. and the euro zone, and on
China's infrastructure spending plans," said Shanghai Metal
Markets analyst Zhang Chenguang. "On top of these, the contract
also benefited from recent announcements of production cuts in
markets outside of China - especially by RUSAL."
    Russian group United Company RUSAL Plc, the
world's largest aluminium producer, said it would cut capacity 3
percent by the year-end and was taking a charge on its
investment in Africa, as it grapples with weak prices and rising
power costs. 
                                                               
  Base metals prices at 0711 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8091.00      1.00     +0.01      6.46
  SHFE CU FUT DEC2    58290       -70     -0.12      4.78
  LME Alum          2083.75      3.75     +0.18      3.16
  SHFE AL FUT DEC2    15795        25     +0.16     -0.28
  HG COPPER SEP2     369.45     -0.25     +6.70      7.52
  LME Zinc          2014.50     -2.50     -0.12      9.19
  SHFE ZN FUT DEC2    15500       115     +0.75      4.77
  LME Nickel       16837.00     12.00     +0.07    -10.01
  LME Lead          2135.75      7.25     +0.34      4.95
  SHFE PB FUT         15910        50     +0.32      4.05
  LME Tin          20850.00    170.00     +0.82      8.59
  LME/Shanghai arb    1570
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE 
 third month

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