METALS-Copper falls on tumbling crude oil, profit-taking

Tue Sep 18, 2012 12:50am IST

* Sharply lower crude oil drags down copper futures
    * Some question whether Fed move will feed into real economy
    * Markets eye euro zone factory data this week


    By Frank Tang and Maytaal Angel
    NEW YORK/LONDON, Sept 17 (Reuters) - Copper fell on Monday as tumbling crude
oil prices prompted investors to take profits after a new round of U.S. monetary
stimulus sent the industrial metal to a 4-1/2-month high in the previous
session.
    Some investors expressed caution over the prospects for prolonged growth in
industrial metals due to a 3 percent slide in Brent oil, slowing activity in
China, and worries the central bank measures will take time to feed through to
the economy.
    Copper, often seen as a barometer of global economic strength, gained 5
percent last week - its biggest jump in 11 weeks - after the Federal Reserve
said it would pump $40 billion into the U.S. economy every month until it sees a
sustained upturn in the weak jobs market. 
    On Monday, LME copper prices notched their biggest daily drop in a month as
financial markets fell across the board on profit-taking after last week's gain
boosted by hopes that the Fed stimulus will boost U.S. economic growth.
    Three-month copper on the London Metal Exchange closed down 1
percent at $8,302 per tonne, after touching a high of $8,386.25 - near the
4-1/2-month top of $8,411 hit in the previous session.
    LME copper rose 3.8 percent on Friday, its largest daily percentage gain
since June 29, and is up nearly 10 percent on the year.
    U.S. COMEX copper futures for December delivery settled down 4.05
cents, or 1.1 percent, at $3.792 a lb.

    HEDGE FUNDS BET ON COPPER
    Hedge funds and other big speculators pumped more than $6 billion into U.S.
commodity markets last week, the most in three weeks, just before the Fed
announced its new round of stimulus, trade data showed on Friday.
 
    Capping some of the metals' gains were worries about China's property
market, a top user of metals for construction but also for collateral as
developers use imports to get cheaper credit.
 
    Factory activity will return to the fore this week with a series of
industrial-sector reports around the world, led by Thursday's euro zone PMI
data.
    In other metals, aluminium closed at $2,167 a tonne, from $2,195 on
Friday. 
    Tin closed at $21,575 a tonne, having hit its highest since early
May at $21,750. It closed at $21,675 on Friday. Zinc, used in
galvanizing, closed at $2,089 from $2,116.
    Battery material lead, untraded at the close, was bid at $2,257 from
$2,265 on Friday, while stainless steel ingredient nickel ended at
$18,220 from $17,775.
    
 Metal prices at 1845 GMT
                                                                           
  Metal            Last      Change  Pct Move   End 2011   Ytd Pct
                                                              move
  COMEX Cu       374.50       -8.75     -2.28     343.60      8.99
  LME Alum      2166.00      -29.00     -1.32    2020.00      7.23
  LME Cu        8300.00      -80.00     -0.95    7600.00      9.21
  LME Lead      2257.00       -8.00     -0.35    2035.00     10.91
  LME Nickel   18215.00      440.00     +2.48   18710.00     -2.65
  LME Tin      21595.00      -80.00     -0.37   19200.00     12.47
  LME Zinc      2089.00      -27.00     -1.28    1845.00     13.22
  SHFE Alu     15835.00      -55.00     -0.35   15845.00     -0.06
  SHFE Cu*     59770.00     -590.00     -0.98   55360.00      7.97
  SHFE Zin     15715.00     -130.00     -0.82   14795.00      6.22
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07
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