March 5, 2010 / 11:45 AM / 10 years ago

METALS-Copper up as U.S. data supports demand outlook

 * U.S. employers cut less jobs than expected in February
 * Comments from China ease concerns about monetary policy
 * Downward pressure ahead as Chile miners resume output
 
 (Updates prices; adds data, analyst's comment)
 By Michael Taylor and Rebekah Curtis
 LONDON, March 5 (Reuters) - Copper rose 3 percent on Friday,
as upbeat U.S. jobs data boosted risk appetite and comments from
China calmed investors' concerns that monetary tightening in the
world's top metal consumer could jeopardise its demand.
 Benchmark copper for three-month delivery CMCU3 on the
London Metal Exchange traded at $7,590 a tonne at 1551 GMT from
$7,370 on Thursday, near a session high of $7,594.
 Western demand is still weak, but economic data is improving
slowly. Boosting sentiment was data showing U.S. employers cut a
smaller than expected 36,000 jobs in February. [ID:nN04107795]
 Also lifting sentiment, China's Premier Wen Jiabao said the
country would stick to an appropriately easy monetary stance and
an active fiscal policy. [ID:nTOE6230AE]
 This helped sooth concerns about Chinese demand, which is
showing signs of softening as the country has moved to a less
accommodative monetary policy to cool rapid growth.
 "The fundamentals have generally been improving," said David
Wilson, an analyst at Societe Generale.
 "There's a little bit more optimism that China is going to
continue to be a major metals consumer," he added.
 "People are little a bit more positive on comments that the
Chinese premier was making about maintaining spending, to
maintain economic growth."
 Copper is up just 2 percent so far this year, whereas
intense demand from China helped the metal used in power and
construction surge 140 percent in 2009. [ID:nTOE62301C].
 
 STOCKS DECLINE
 Also supporting prices, copper stocks at LME warehouses fell
1,075 tonnes to 543,150 tonnes -- levels not seen since early
February -- maintaining a recent downward trend.
 Copper's gains follow a five-week peak in prices on Monday
after a weekend earthquake forced top producer Chile to
temporarily shut down nearly a quarter of its mine capacity.
[ID:nCHILE]
 But as miners restart production this support is fading.
[ID:nN03242555] [ID:nWLB9145]
 For more on the Chile quake, see [ID:nN28135112] [ID:nCHILE]
 "We still would be cautious about metals here, as we think
copper has more work to do on the downside in that it has yet to
give up most of this week's earthquake-induced gains," Edward
Meir, an analyst at MF Global said in a note.
 Aluminium CMAL3 was at $2,248 from $2,215 and earlier
reached $2,250, its highest since late January. LME stocks of
the metal, used in transport and packaging, slipped 6,850 tonnes
to 4.5 million tonnes.
 A large portion of those aluminium stocks are tied up in
finance deals to release cash for producers and to earn banks
higher returns than they would get in money markets.
[ID:nGEE5BA277]
 Among other base metals, steel making ingredient nickel
CMNI3 traded at $22,650 from $22,300, while battery material
lead CMPB3 was at $2,245.50 from $2,170.
 Zinc CMZN3 traded at $2,352 a tonne from $2,259 and tin
CMSN3 was at $17,525 from $17,250.
 
 Metal Prices at 1553 GMT
 Metal            Last      Change  Pct Move   End 2009   Ytd Pct
                                                          move
 COMEX Cu       343.45        7.40     +2.20     332.75      3.22
 LME Alum      2245.00       30.00     +1.35    2230.00      0.67
 LME Cu        7590.00      220.00     +2.99    7375.00      2.92
 LME Lead      2245.00       75.00     +3.46    2432.00     -7.69
 LME Nickel   22600.00      300.00     +1.35   18525.00     22.00
 LME Tin      17475.00      225.00     +1.30   16950.00      3.10
 LME Zinc      2350.00       91.00     +4.03    2560.00     -8.20
 SHFE Alu     16730.00       45.00     +0.27   17160.00     -2.51
 SHFE Cu*     59750.00      430.00     +0.72   59900.00     -0.25
 SHFE Zin     18430.00      240.00     +1.32   21195.00    -13.05
** 1st contract month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
 (Editing by James Jukwey)

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