December 15, 2011 / 12:07 PM / in 8 years

METALS-Copper closes steady; growth fears offset data

* U.S. jobless claims at 3-1/2-year low, NY factories pick
up speed
    * Euro bounces from 11-month low vs dollar
    * Freeport sees Indonesia mine full operations resuming by
early 2012

    By Melanie Burton	
    LONDON, Dec 15 (Reuters) - Copper closed almost
unchanged on Thursday, with signs of economic growth in the
United States and a retreating dollar balancing concerns about
faltering growth in Europe and top metals user China.	
    Three-month copper on the London Metal Exchange 
closed at $7,211 a tonne, from $7,210 at the close on Wednesday.	
    The metal, considered a bellwether economic indicator
because it is used in building construction and power cables,
whipsawed from its lowest since Nov. 24 at $7,131 to a high of
$7,342. It is down around 8 percent so far this month.	
    "What yesterday told us was that the markets have turned
even more bearish on the macro outlook. What we saw was people
becoming more confident of shorting the metals...because people
weren't convinced with what happened with the EU summit (last
week)," said analyst Gayle Berry of Barclays Capital.	
    "Unless we get any fantastic surprises on the upside by
European lawmakers in the next week, which is doubtful, then I
think this strength will prove short-lived."	
    A series of euro zone summits have failed to solve the
region's debt crisis, causing investors to sell out of assets
perceived as risky, including industrial metals, and consumers
to hold back their orders for next year.	
    The decline in the euro zone's private sector eased a little
this month, but a recession still looks inevitable with the
region's periphery struggling, a key business survey showed on
Thursday. 	
    Data showing China's first year-on-year drop in foreign
direct investment in 28 months, highlighted the increasing risk
to China's growth posed by slowing developed market economies.
 	
    But while Europe's debt problems continue, there are signs
the United States' economy is on the mend. U.S. jobless claims
on Thursday fell to a 3-1/2-year low and a survey showed New
York factories picked up speed this month. 	
    The euro bounced from an 11-month low against the dollar
after the strong U.S. data whetted risk appetite. A weaker
dollar makes metals priced in the U.S. unit less expensive for
holders of other currencies. 	
   "There has been vacillation on the economic and political
news flow. We've had some mixed data points," said Duncan Hobbs,
a senior analyst at Macquarie.	
    The funding stress that has triggered a sharp sell-off in
precious metals is also having an effect on industrial metals. 	
    "Since industrial metals are more cyclical, they tend to be
even more affected by such adverse financial market conditions,"
Credit Suisse Private Banking analysts said in a note.	
        	
    COPPER SUPPORT CRACKS	
    London traders said the market was in a sell-the-rallies
mode, even in copper which has been better underpinned than
other metals given its crimped supply pipeline.     	
    "Short-covering spikes are going to happen, but it's
definitely sell the rallies here, definitely copper, last time
we were down here we had a lot of Chinese interest -- this time,
not a squeak," said one LME floor trader.	
    Fears of a shortage of copper have eased somewhat, which
will also have a negative effect on the metal's price.	
    Freeport McMoRan Copper & Gold Inc expects full
operations at its Indonesia mine to resume by early 2012 after
reaching a pay deal on Wednesday to end a three-month strike
that paralysed output at the world's second-biggest copper
deposit. 	
    However demand remains steady with a large shipment of new
orders in New Orleans on Thursday, according to LME data,
possibly bound for China. 
    LME copper stockpiles have dropped by nearly one quarter
since mid July.	
    "While everyone is worrying about demand, copper mine supply
is still struggling," Hobbs said. "I think if and when some of
these macro worries moderate and investors focus more on the
supply side challenges then copper should respond accordingly."	
     Among other metals, aluminium closed at $1,975 from a
$1,962 close on Wednesday when it sank to a 2011 trough. The
poor demand environment has many traders expecting more metal to
arrive in LME sheds. 	
    Battery material lead closed at $1,975 from $1,998,
and zinc at $1,844.5 from $1,845 at Wednesday's close.
Nickel closed at $17,895 from $17,400 and tin at
$18,600 from $18,525.	
    	
 Metal Prices at 1724 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2010   Ytd Pct
                                                              move
  COMEX Cu       327.70        0.20     +0.06     444.70    -26.31
  LME Alum      1977.50       15.50     +0.79    2470.00    -19.94
  LME Cu        7223.00       13.00     +0.18    9600.00    -24.76
  LME Lead      1972.75      -25.25     -1.26    2550.00    -22.64
  LME Nickel   17901.00      501.00     +2.88   24750.00    -27.67
  LME Tin      18600.00       75.00     +0.40   26900.00    -30.86
  LME Zinc      1847.25        2.25     +0.12    2454.00    -24.72
  SHFE Alu     15645.00     -190.00     -1.20   16840.00     -7.10
  SHFE Cu*     53050.00    -2390.00     -4.31   71850.00    -26.17
  SHFE Zin     14715.00     -255.00     -1.70   19475.00    -24.44
 ** 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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