May 30, 2012 / 1:57 AM / in 5 years

METALS-Copper falls on Spanish banking woes

SHANGHAI, May 29 (Reuters) - Copper slipped on Wednesday
after news that Spain needed to issue new debt to recapitalise a
troubled lender and the country suffered another rating
downgrade, stoking worries about the euro zone's debt crisis.	
    Germany's 10-year bond yield hit a fresh record low on the
news, indicating a flight to safety by investors. This was
despite a recent spate of announcements by Beijing on spending
programmes to stimulate the economy and signs of improvement in
the U.S. property market.	
    	
    FUNDAMENTALS	
    * Three-month copper on the London Metal Exchange 
edged down 0.4 percent to $7,639 a tonne by 0120 GMT, after
falling 0.2 percent on Tuesday.	
    * The most-active September copper contract on the Shanghai
Futures Exchange fell 1.1 percent to 55,480 yuan
($8,700) a tonne, after losing 0.2 percent in the prior session.	
    * Germany's 10-year bond yield hit a fresh record low while
the euro edged towards its weakest in two years on Tuesday as
doubts grew over Spain's plan to recapitalise its banks and
obtain finance for its struggling regional governments.
 	
    * In a bid to contain its debt crisis, Spain will
recapitalise nationalised lender Bankia by issuing new
debt, not by injecting bonds into the lender, a government
source told Reuters on Tuesday. The source added that Spain will
likely adopt on Friday a new mechanism to back its regions'
debt. 	
    * Egan-Jones Ratings cut Spain's credit level yet again on
Tuesday, the third downgrade from the agency in less than a
month as the country's weak banks continue to worry investors.
 	
    * As the euro zone ponders a possible Greek exit,
policymakers have not yet built a shield robust enough to
prevent a bank run in one country sending others in the bloc
deeper into crisis. 	
    * China plans to allocate an annual fund of up to 2 billion
yuan ($315 million) from this year to help develop and mass
produce energy-saving vehicles to cut carbon emissions, the
government said. 	
    * U.S. home prices edged higher for the second month in a
row in March as the housing recovery picked up traction, while
gains in some of the hardest hit areas suggested the improvement
was becoming more broad-based. 	
    * For the top stories in metals and other news, click   	
, or 	
                     	
    MARKET NEWS	
    * Asian shares slipped on Wednesday, hurt by fears that
Spain's banking woes will push up the country's borrowing costs
to unsustainable levels, although falls were limited on hopes
that Greece would stay in the euro zone and for China stimulus
steps. 	
    * Worries over Spain's finances also pushed the euro lower
on Tuesday to its weakest level versus the U.S. dollar since
July 2010. 	
    	
    DATA/EVENTS (GMT)	
0800  EZ    Money-M3 3m moving av     Apr     	
0900  EZ    Business climate          May     	
0900  EZ    Economic sentiment        May     	
1145  U.S.  ICSC chain stores yy      Weekly  	
1255  U.S.  Redbook U.S. retail sales Weekly	
1400  U.S.  Pending home sales        April	
    	
                                                               
  Base metals prices at 0120 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7639.00    -31.00     -0.40      0.51
  SHFE CU FUT SEP2    55480      -600     -1.07     -0.27
  LME Alum          2020.25      4.25     +0.21      0.01
  SHFE AL FUT SEP2    16000       -30     -0.19      1.01
  HG COPPER JUL2     345.30     -0.90     -0.26      0.49
  LME Zinc          1908.25     -5.75     -0.30      3.43
  SHFE ZN FUT SEP2    14950       -70     -0.47      1.05
  LME Nickel       16686.00     36.00     +0.22    -10.82
  LME Lead          1948.00      0.00     +0.00     -4.28
  SHFE PB FUT         15200       -50     -0.33     -0.59
  LME Tin          20190.00    -10.00     -0.05      5.16
  LME/Shanghai arb    1044
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE 
 third month
                                                               
 ($1 = 6.3480 Chinese yuan)	
	
 (Reporting by Carrie Ho; Editing by Chris Gallagher)

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