January 23, 2012 / 10:43 AM / 8 years ago

METALS-Copper up on Greek debt deal hopes

* China, most of Asia shut for Lunar New Year
    * China copper imports hit record high in December
    * Eyes on Greek debt restructuring deal

    By Maytaal Angel and Silvia Antonioli	
    LONDON, Jan 23 (Reuters) - Copper rose almost 2 percent on Monday as
the euro rose against the dollar on signs Greece may be close to a deal to
restructure its debt, giving hopes that the euro zone sovreign debt crisis might
be contained.	
    Three-month copper on the London Metal Exchange closed at $8,365 a
tonne, 1.7 percent up from a close of $8,225 on Friday.	
    Copper touched a four-month high of $8,428.50 on Friday and has gained
around 9 percent in the year to date. 	
    Trade in Asia was extremely slow, with many markets including top consumer
China closed for the Lunar New Year break, and volumes during European trading
hours were also quite low.	
    "The market remains in a risk-on mode with bond yields continuing to fall
and a favourable euro/dollar exchange," said T-commodity consultant Gianclaudio
    "However, I remain quite a sceptic when it comes to further gains for the
week ahead as open interest is falling and fundamentals are not bullish."	
    Open interest , an indication of players' activity, has
declined lately, data shows.	
    A weaker dollar against the euro and falling Italian bond yields helped to
lift market sentiment.	
    Italian government bond yields fell, with traders citing European Central
Bank buying of short-dated Italian bonds in the secondary market. The euro hit
its highest level in nearly three weeks against the dollar on tentative optimism
that Greece will cut a deal with its creditors on a debt swap.
    A weaker U.S. unit makes dollar-priced commodities more affordable for
holders of other currencies.	
    French Finance Minister Francois Baroin said the euro zone economy was
showing signs of stabilisation and that a deal with private sector investors
about resolving Greece's debt crisis was taking shape. 	
    Some fundamentals for copper remained positive. The latest data showed
copper inventories in LME warehouses, which are seen as indicators of demand
strength, fell by 2,975 tonnes to 345,775, their lowest point since early
October 2009. 
    Also helping the metal used in power and construction, weekend data showed
China's refined copper imports rose 18.3 percent in December from the previous
month to a record high 406,937 tonnes.                 	
     But, copper inventories in warehouses overseen by the Shanghai Futures
Exchange rose 9.3 percent, or 11,193 tonnes, to 131,645 tonnes last
week, the highest since April 2011. 	
    "Futures curves of industrial metals at the Shanghai Futures Exchange have
fallen into contango. The price differential between Chinese prices and London
prices has narrowed. This indicates that the Chinese market is now adequately
supplied," said Credit Suisse in a note.	
    "How much of this is due to simple re-stocking ahead of the Chinese New Year
and how much is because of weaker demand remains to be seen. The concern is that
most of this might be due to demand weakness."	
    Soldering metal tin, the best performing LME metal this month,
closed at $22,150 a tonne from $21,850, while zinc, used in galvanizing,
ended at $2,059 from $2,012.	
    Battery material lead finished $2,244 a tonne from $2,184, and
aluminium at $2,238 from $2,215.	
     Stainless-steel ingredient nickel closed at $20,305 from $20,450.	
 Metal Prices at 1701 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in 
  Metal            Last      Change  Pct Move   End 2010   Ytd Pct
  COMEX Cu       379.30        5.10     +1.36     444.70    -14.71
  LME Alum      2232.50       17.50     +0.79    2470.00     -9.62
  LME Cu        8359.00      134.00     +1.63    9600.00    -12.93
  LME Lead      2237.25       53.25     +2.44    2550.00    -12.26
  LME Nickel   20353.00      -97.00     -0.47   24750.00    -17.77
  LME Tin      22076.00      226.00     +1.03   26900.00    -17.93
  LME Zinc      2053.25       41.25     +2.05    2454.00    -16.33
  SHFE Alu     16395.00       30.00     +0.18   16840.00     -2.64
  SHFE Cu*     60720.00      160.00     +0.26   71850.00    -15.49
  SHFE Zin     15855.00      195.00     +1.25   19475.00    -18.59
 ** 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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