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METALS-LME copper eases, still near 4-mth peak ahead of Fed decision
September 13, 2012 / 5:06 AM / 5 years ago

METALS-LME copper eases, still near 4-mth peak ahead of Fed decision

* German court approval of euro zone bailout supports prices
    * Chinese spot copper 150-200 yuan lower than prompt futures
    * Coming up: U.S. FOMC releases post-meeting statement; 1630
GMT

 (Updates prices; adds quotes, details)
    By Carrie Ho
    SHANGHAI, Sept 13 (Reuters) - Copper edged lower on
Thursday, but held near a four-month high hit in the previous
session, as traders awaited a key U.S. Federal Reserve policy
decision that is expected to include further stimulus action to
boost the world's largest economy.
    Prices were also supported by a German court ruling that
gave a green light for the country to ratify the euro zone's new
bailout fund and budget pact, boosting hopes that the region is
finally putting in place the tools to resolve its crippling debt
crisis. 
    "Some longs prefer to take profit ahead of the (Fed) meeting
since they've already made money on their positions and because
there is always a chance that the Fed won't start another round
of quantitative easing - even if many people expect it," said a
Shanghai-based trader with an international firm.
    RBC Base Metals said in a research note on Thursday that it
expected mostly sideways movements in base metals, with small
rises and falls in prices until the United States or China
clarified whether they were putting out more monetary easing
policies. 
    Three-month copper on the London Metal Exchange had
ticked down 0.4 percent to $8,068 per tonne by 0720 GMT, after
hitting a high of $8,109 earlier in the session - not far from
Wednesday's four-month peak of $8,170.
    The most active January copper contract on the Shanghai
Futures Exchange closed the session 0.3 percent lower at
 58,120 yuan ($9,200) per tonne.
    A Reuters poll showed economists raised their bets for a
third round of Fed bond buying known as quantitative easing to
65 percent from 60 percent in August.   
    In China's physical copper market, spot cargoes were trading
about 180-250 yuan lower than the ShFE prompt September month
 contract, reflecting sluggish demand from downstream
industries. 
    The ShFE September contract, however, is trading at a
premium to forward months. The backwardation, traders said, was
not due to tighter spot demand but due to Jinchuan Group,
China's third-largest smelter, buying up about 20,000-30,000
tonnes of copper over the past few weeks. 
    "Downstream customers don't want to restock too much before
the 18th Party Congress, which is expected to offer more clarity
on where the Chinese economy is headed," said a Shanghai-based
physical trader.
    The Communist Party Congress, China's most important
political event, is held once every five years with its top
leaders being replaced only every decade. It is expected to be
held in October but the exact timing has not been announced. 
    For now, the world's second-largest economy has introduced
some measures to prop up growth.
    It announced on Wednesday that it would boost exports by
issuing export tax rebates faster and granting more loans to
exporters, as well as increasing export credit insurance to
small companies. 
    It recently also approved $157 billion in infrastructure
spending.  
    Expectations that the Fed will act are fuelling speculation
that China may also ease policy soon to shore up its cooling
economy. 
                                                               
  Base metals prices at 0720 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8068.00    -28.00     -0.35      6.16
  SHFE CU FUT JAN3    58120      -190     -0.33      4.48
  LME Alum          2076.00    -10.00     -0.48      2.77
  SHFE AL FUT DEC2    15710       -85     -0.54     -0.82
  HG COPPER DEC2     368.00     -1.25     -0.34      7.10
  LME Zinc          2004.00    -14.00     -0.69      8.62
  SHFE ZN FUT DEC2    15305      -195     -1.26      3.45
  LME Nickel       16582.00    -68.00     -0.41    -11.37
  LME Lead          2110.00    -15.00     -0.71      3.69
  SHFE PB FUT         15800      -110     -0.69      3.34
  LME Tin          20350.00   -445.00     -2.14      5.99
  LME/Shanghai arb    1609
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE 
 third month
 ($1 = 6.3264 Chinese yuan)

 (Reporting by Carrie Ho; Editing by Himani Sarkar and Chris
Lewis)

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