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METALS-Copper slips on low China buys; Greek boost fades
March 20, 2012 / 6:12 AM / 6 years ago

METALS-Copper slips on low China buys; Greek boost fades

* ShFE-LME three-months copper price differential weakest
since Jan 2011
    * Lacklustre Chinese demand seen capping copper gains
    * Coming up: Feb U.S. housing starts/building permits; 1230
GMT

 (Adds detail, updates prices)	
    By Melanie Burton	
    SINGAPORE, March 20 (Reuters) - London copper turned
negative on Tuesday as support began to fade from an orderly
auction of Greek default insurance that boosted the euro, while
bleak demand expectations from Chinese copper consumers
discouraged buys.	
    Three-month copper on the London Metal Exchange fell
0.44 percent to $8,532.25 per tonne by 0529 GMT, having taken
aim at $8,600 earlier in the session. 	
    Copper hit its highest in two weeks at $8,690 on Friday and
is up more than 12 percent this year, but prices have struggled
to gain traction above this level.	
    The most-traded June copper contract on the Shanghai Futures
Exchange eased 0.10 percent to 60,240 yuan ($9,500) per
tonne.	
    Demand from top consumer China remained slack, with little
hope for solid improvement from Chinese consumers given that
demand from their export markets is still soft, Standard
Chartered metals analyst Judy Zhu said.	
    "In the last week copper prices have stabilized around
$8,500 a tonne, but it's really moving nowhere and facing strong
overhead resistance," she said.	
    "Demand is starting to recover from last months' previously
low levels but consumers don't expect any strong recovery this
year - that's the problem," she said.  	
    China accounts for 40 percent of global refined demand. 	
    Consumers are keeping low inventories and are reluctant to
purchase any more material than they need immediately because of
expectations prices will stay low and the high cost of financing
material in China, where access to credit remains cramped.	
    Reflecting an absence of near-term purchases, the negative
price differential between London and Shanghai copper hit a
14-month low near $450 on Tuesday. Front-month Shanghai copper
remains at a 400-yuan discount to third-month prices, having
been at a premium late last year.	
    Still, China's arrivals of refined copper may rise this
month after February's higher than expected figure, as importers
scheduled more term shipments under 2012 contracts, traders
said, and as metal is used for financing purposes. The February
breakdown will be released on March 21. 	
    Lending some support to prices, the dollar fell as easing
fears about the threat posed to the euro zone by Greece
diminished the U.S. currency's safe-haven appeal. Asian shares
crept higher following a rally on Wall Street. 	
    Markets will be watching closely for U.S. housing figures
later in the session, after poor figures for China's housing
market on Monday flustered investors, Credit Suisse Private
Banking said in a note.	
    "Market participants expect a moderate pick-up of activity
from very low levels. This would be positive news for metals, as	
housing accounts for a sizeable share of metals demand," it
said.	
    In metals news, Swiss commodities giant Glencore
International will resume operations at the only copper
refinery in the Philippines by June or July, six months after a
fire halted its operations, a company official told Reuters on
Tuesday.   	
    Also, Australia's parliament passed laws for a new 30
percent tax on iron ore and coal mine profits on Monday after a
bruising two-year battle with mining companies, a major victory
for Prime Minister Julia Gillard and her struggling minority
government. 	
                                                             
  Base metals prices at 0529 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8532.25    -37.75     -0.44     12.27
  SHFE CU FUT JUN2    60240       -60     -0.10      8.82
  HG COPPER MAY2     388.40     -2.50     -0.64     13.04
  LME Alum          2270.25     -4.75     -0.21     12.39
  SHFE AL FUT JUN2    16265       -10     -0.06      2.65
  LME Zinc          2071.00     -8.00     -0.38     12.25
  SHFE ZN FUT JUN2    15855       -20     -0.13      7.16
  LME Nickel       18980.00    -70.00     -0.37      1.44
  LME Lead          2097.00    -11.00     -0.52      3.05
  SHFE PB FUT      15825.00    -40.00     -0.25      3.53
  LME Tin          23600.00      5.00     +0.02     22.92
  LME/Shanghai arb^    2848
 
   Shanghai and COMEX contracts show most active months
    	
	
 (Reporting by Melanie Burton; Editing by Clarence Fernandez and
Paul Tait)

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