December 16, 2011 / 11:08 AM / 8 years ago

METALS-Copper ends up on surprise U.S. data, technical buys

* U.S. consumer prices are flat in Nov
    * Indonesia plans export tax on range of commodities
    * Shanghai copper stocks rise by 9.4 pct

    By Susan Thomas and Melanie Burton	
    LONDON, Dec 16 (Reuters) - Copper rose on Friday, due to a retreating
dollar and firm U.S. economic data, but gains look vulnerable going into next
week with Europe's debt crisis and its impact on metals demand still causing
    Industrial metals have fallen this year as Europe's problems stunt economic
growth, sap banks' lending for commodity trading and threaten to dampen demand
for goods exported by emerging nations. 	
    "Prices have been under pressure this week because of, more than anything,
renewed concerns about the euro problem," said analyst Stephen Briggs of BNP
    "After a big fall like that, you tend to square positions. Obviously
turnover will rapidly decline through next week in all financial markets which
in itself leaves the market open to volatility, especially if there are any
    A steadier tone in wider markets, and a halt in the slide of the
euro against the dollar was lending metals some support on Friday. A softer
dollar makes commodities less expensive for holders of other currencies. 
     Also, government data showed U.S. inflation pressure waning,
fanning expectations the Federal Reserve could do more to boost economic growth.
The latest consumer price report followed  data on Thursday suggesting a
possible pick-up in job growth, which has been meagre during the current
    Three-month copper on the London Metal Exchange, closed at
$7,345, from $7,211 on Thursday's close. 	
    The metal is down around 6 percent for the week, on track for its biggest
weekly loss since the end of September and the first annual decline since 2008,
when the global credit crunch was at its worst.	
    "In the current environment we would argue that it is still too early to buy
industrial metals," Credit Suisse said in a note. "However, yesterday's economic
data already gave a hint that fortunes could turn more positive for industrial
metals in 2012."	
     Surprising resilience in the U.S. economy and corporate sector underpinned
investor appetite for risky assets into the year end, although trading is
thinning out ahead of a holiday season.	
     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. 	
    "As of now, these factors are still in the backseat given the liquidity
stress. However at one point in 2012, we think industrial metals could start to
recover significantly," Credit Suisse said.	
    Possible cuts in the credit ratings of euro zone countries are looming after
a European Union summit last week offered little respite to turbulent euro zone
bond markets and cash-starved European banks.	
    Europe's top central banker said that euro zone governments are on the right
track to restore market confidence but reminded them that an emergency programme
to buy their bonds was "neither eternal nor infinite". 	
    The volatility the crisis has caused has led to losses at brokers and banks.	
    Credit Agricole this week said it will stop trading commodities
and slash its financing of the multi-billion-dollar commodities trade as the
euro zone crisis worsens. 	
     Price gains may be capped as production at mines resumes following labour
    Freeport McMoRan Copper & Gold Inc expects full operations at its
Indonesia mine to start 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. 	
    But warehouse inventories of copper are rising. 	
    Copper inventories in warehouses monitored by the Shanghai Futures Exchange
rose 9.4 percent from a week earlier, while stocks in warehouses monitored by
the LME fell 825 tonnes to 381,250 tonnes, representing around a week's worth of
global consumption. 	
   "This is the second week which copper inventory in Shanghai moved
higher. For the second week running cash copper is trading at a discount to the
SFE January contract which is resulting in metal flowing into Shanghai
warehouse," said Standard Bank in a research note.	
    Three-month tin was $18,8 0 0, from
$18,600 at the close on Thursday.	
    Indonesia, a major global producer of raw materials, plans to impose export
taxes on a range of commodities, including metals and rubber, as part of a raft
of new fiscal policies for next year, the industry minister said on Friday.
    Aluminium finished at $2,005, from $1,975. Zinc
 ended at $1,8 68 from $1,844.5, lead was
$ 1,960 from $1,875, and nickel 
 $18,5 50 from $17,895. 	
 Metal Prices at 1705 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       331.60        5.30     +1.62     334.65     -0.91
  LME Alum      2003.50       28.50     +1.44    2230.00    -10.16
  LME Cu        7345.00      134.00     +1.86    7375.00     -0.41
  LME Lead      1960.00      -15.00     -0.76    2432.00    -19.41
  LME Nickel   18550.00      655.00     +3.66   18525.00      0.13
  LME Tin      18750.00      150.00     +0.81   16950.00     10.62
  LME Zinc      1868.00       23.50     +1.27    2560.00    -27.03
  SHFE Alu     15835.00      190.00     +1.21   17160.00     -7.72
  SHFE Cu*     54300.00     1250.00     +2.36   59900.00     -9.35
  SHFE Zin     14950.00      235.00     +1.60   21195.00    -29.46
 ** 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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