July 20, 2012 / 5:15 AM / 8 years ago

METALS-LME copper edges off 2-week top on China property warning

* Beijing warns against lifting property purchase curbs
    * Gloomy U.S. factory activity, jobs data weigh
    * LME copper meets psychological resistance at $7,800 -
trade
    * Bets on cut in China bank reserves requirement this
weekend -trade
    * Coming Up: U.S. CFTC commitment of traders data weekly;
1930 GMT

 (Updates prices; adds quotes, details)
    By Carrie Ho
    SHANGHAI, July 20 (Reuters) - London copper prices edged
down on Friday, weighed down by China's warning against relaxing
curbs on the property sector, a move many investors favour as a
quick way to boost domestic consumption.
    Recent weak U.S. data that underscores a fragile U.S.
economic recovery also dampened sentiment amid investor worries
about a global economic slowdown.
    "The government's latest comments on property purchase curbs
dashed the hopes of those who were looking for a reversal on
current restrictions, which will likely boost metals demand from
construction and household appliances," said CIFO Futures
analyst Zhou Jie.
    Beijing issued a firm reminder to local governments to keep
clamping down on property speculation, underlining official
concerns about renewed inflationary pressures even as the
broader economy slows. 
    Three-month copper on the London Metal Exchange fell
0.1 percent to $7,719.75 per tonne by 0729 GMT after touching a
two-week high of $7,813 on Thursday, its highest since July 3.
It is on track to post a weekly rise of 0.2 percent in its
second such increase in a row.
    From a technicals perspective, after London copper failed to
guard its position above the $7,800 resistance level, it fell
back to its previous range of $7,600 to $7,800, Zhou said. 
    "Today's movements reflect this," he added.
    Reuters technical analyst Wang Tao expects LME copper to
retrace to $7,697 per tonne due to a resistance zone of
$7,823-$7,839. 
    The most active November copper contract on the Shanghai
Futures Exchange fell 0.6 percent to 55,910 yuan
($8,800) per tonne, pushed down by Shanghai equities amid thin
trading volumes. Shanghai copper is up 0.8 percent on
the week.
    Traders said contracts' real trading volumes were low as
Chinese speculators were still focused on agricultural futures.
 
    "Taken at face value, Shanghai copper trading volumes of
over 300,000 lots today were already relatively small. And this
number includes open positions being moved to November," said
one trader.     
    
     
    
    Worries over a slowdown in the U.S. economy rose after data
showed factory activity in the Mid-Atlantic region contracted in
July for a third straight month and that new claims for jobless
aid surged last week. 
    This offset a spot of good news from the euro zone, where
German Chancellor Angela Merkel easily won a parliamentary vote
on a euro zone rescue package for Spanish banks on Thursday, and
from Japan, where a poll showed big manufacturers' outlook
improving slightly in July.  
    Looking forward, many investors are betting on new Chinese
stimulus measures this weekend after Premier Wen Jiabao said
Beijing needed to step up efforts to create jobs.
  
    "We can't rule out the possibility of Beijing rolling out
more monetary easing or investment policies soon, which will
push base metals prices higher," said Wan Ling, an analyst with
consultancy CRU Group.
     
                                                               
  Base metals prices at 0729 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7719.75    -10.25     -0.13      1.58
  SHFE CU FUT NOV2    55910      -320     -0.57      0.50
  LME Alum          1933.50    -10.50     -0.54     -4.28
  SHFE AL FUT OCT2    15590       -25     -0.16     -1.58
  HG COPPER SEP2     350.50     -2.95     -0.83      2.01
  LME Zinc          1866.50    -20.00     -1.06      1.17
  SHFE ZN FUT OCT2    14705      -125     -0.84     -0.61
  LME Nickel       16057.00      2.00     +0.01    -14.18
  LME Lead          1914.00    -15.50     -0.80     -5.95
  SHFE PB FUT         14995       -25     -0.17     -1.93
  LME Tin          19050.00    -45.00     -0.24     -0.78
  LME/Shanghai arb    1647
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE 
 third month
 ($1 = 6.3734 Chinese yuan)

 (Editing by Clarence Fernandez)
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