India copper rises on China news, buoys complex

MUMBAI, Dec 1 (Reuters) - Indian copper futures were up on Monday after news that China's Yunnan province would build a stockpile of base metals, temporarily offsetting negative sentiment from slowing demand, analysts said.

China's Yunnan province would buy 150,000 tonnes of copper, 300,000 tonnes of zinc and 100,000 tonnes of tin in order to help operations of metal smelters struggling with weak domestic demand and low prices. [nHKG203215]

At 3.40 p.m., benchmark February copper MCCG9 was up 0.87 percent at 191.15 rupees per kg.

"The news has definitely supported copper prices but this also is a very temporary kind of support.. ultimately it gets down to the fundamentals of slowing demand," said an analyst with a Mumbai-based brokerage.

Weighing on sentiment along with global demand worries is a slow start to the U.S. holiday shopping season, which is likely to bring little Christmas cheer to markets and sales are also likely to be worse than thought. [nSP367448]

The U.S. is the second largest consumer of base metals in the world.

"Intraday MCX copper is expected to rally from current levels and test 192 rupees," said Debjyoti Chatterjee, associate vice-president, MAPE Admisi Commodities Pvt Ltd.

The Yunnan province news also helped sentiment and lifted other metals such as zinc, nickel and lead, analysts said.

Zinc prices also received support from news that Korea zinc (010130.KS: Quote, Profile, Research), the world's second-biggest zinc refiner, said it would cut zinc production by 10 percent for 13 months, joining a long list of rivals slashing output to battle falling prices and slowing demand. [nSP367448]