December 13, 2011 / 10:53 AM / 8 years ago

METALS-Copper eases on stronger dollar, euro zone fears

* Copper down more than 20 percent in year to date
    * Aluminium stocks hit fresh record high
    * Freeport copper mine owners and unions close to pay deal

    By Harpreet Bhal and Silvia Antonioli	
    LONDON, Dec 13 (Reuters) - Copper closed slightly down on Tuesday after volatile
trading and prices were near their lowest levels in almost two weeks as the dollar strengthened
and investors remained sceptical of Europe's efforts to pull itself out of a debt crisis.	
    Three-month copper on the London Metal Exchange closed at $7,600 a tonne, compared
with a close of $7,606 on Monday, when prices had fallen to a near two-week low during the
session at $7,565.50.	
    Earlier, the metal used in power and construction hit a session high of $7,686.75 a tonne as
the euro reached a session peak against the dollar. 	
    As the dollar recovered and turned positive against the euro, however, copper erased
previous gains.	
     A weak dollar makes commodities priced in the U.S. unit cheaper for holders of other
    Copper has fallen around 21 percent so far this year, ending a run of two straight annual
gains, on worries about the demand outlook for industrial metals as the crisis in Europe
threatens to crimp growth in the global economy.	
    Doubts lingered over Europe's ability to calm market fears surrounding its growing debt
crisis and uncertainty grew about whether its efforts so far would be enough to fend off a mass
downgrade of sovereign credit ratings within the currency bloc. 	
    "Trade is thin and the market is still digesting the rather inconclusive EU summit last
weekend, which didn't offer any short-term resolution," Credit Agricole analyst Robin Bhar said.	
    "The only external influence is the exchange rate. It seems that metals are moving in tandem
with currencies."	
     A pact among up to 26 European Union countries to enforce stricter budget rules and win
back confidence in the euro zone will be finalised by March 2012, European Council President
Herman Van Rompuy said on Tuesday. 	
    Credit rating agency Moody's said on Monday it intended to review the ratings of all 27
European Union states in the first quarter of 2012, while Fitch said pressure on their ratings
had risen after last week's EU summit, which it said yielded no comprehensive crisis solution. 	
    News that Germany's chancellor Angela Merkel has rejected any suggestion of raising the
funding limit of Europe's future bailout fund, the European Stability Mechanism (ESM), also
weighed on market sentiment. 	
    Investors are expected to closely monitor a U.S. Federal Reserve meeting, with an outcome
due after European markets close. 	
    The Fed is likely to hold off offering the U.S. economy fresh stimulus as it weighs
encouraging signs on the recovery against risks coming from Europe. 	
    Freeport McMoRan Copper & Gold Inc and its Indonesian workers' union expect to sign
a pay deal on Tuesday to end a three-month strike that has crippled production at the world's
second-biggest copper mine, two sources told Reuters. 	
    The decline in copper prices has been limited in recent months by output disruption at some
of the biggest mines in the world, including Freeport's Grasberg in Indonesia and Cerro Verde in
    "Metals-specific fundamentals seem to take a backseat for now as the negative implications
of ongoing sovereign debt problems are back in focus," Credit Suisse said in a note. 	
    Across other metals, aluminium traded at $2,000 a tonne from a close of $2,015 a
tonne on Monday. 	
    LME data showed 100,000 tonnes of aluminium flowed into warehouses in Detroit, with total
aluminium stocks in LME-registered warehouses climbing to a fresh record high of 4,811,550
    Zinc, used in galvanizing, changed hands at $1,912 a tonne, from $1,932 Monday's
close, while tin, untraded in rings, was bid at $19,500 from $19,900. 	
    Nickel, untraded in rings, was bid at $18,300 a tonne from $18,450 while battery
material lead changed hands at $2,085 from Monday's close of $2,105.50.	
     Most of China's larger battery manufacturing plants have reopened after obtaining
environmental clearance, pushing demand for refined lead higher and prompting smelters to raise
production, industry sources said on Tuesday. 	
 Metal Prices at 1728 GMT
 Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
  Metal            Last      Change  Pct Move   End 2009   Ytd Pct
  COMEX Cu       344.00       -1.80     -0.52     334.65      2.79
  LME Alum      2001.00      -14.00     -0.69    2230.00    -10.27
  LME Cu        7600.00       -6.00     -0.08    7375.00      3.05
  LME Lead      2085.00      -20.50     -0.97    2432.00    -14.27
  LME Nickel   18300.00     -150.00     -0.81   18525.00     -1.21
  LME Tin      19500.00     -400.00     -2.01   16950.00     15.04
  LME Zinc      1911.00      -21.00     -1.09    2560.00    -25.35
  SHFE Alu     16020.00     -115.00     -0.71   17160.00     -6.64
  SHFE Cu*     56120.00     -640.00     -1.13   59900.00     -6.31
  SHFE Zin     15355.00     -220.00     -1.41   21195.00    -27.55
 ** Benchmark month for COMEX copper
 * 3rd contract month for SHFE AL, CU and ZN
 SHFE ZN began trading on 26/3/07
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below