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METALS-Copper drops on renewed euro zone concerns
September 26, 2012 / 5:06 AM / 5 years ago

METALS-Copper drops on renewed euro zone concerns

* Protesters and police clash in Madrid
    * Spanish concerns weigh on euro
    * Spot copper demand low ahead of Chinese holiday
    * Coming Up: U.S. new home sales; 1400 GMT

 (Updates prices; adds quotes, details)
    By Carrie Ho
    SHANGHAI, Sept 26 (Reuters) - London copper slipped on
Wednesday, partially reversing gains of more than 1 percent in
the prior session, as anti-austerity protests in Spain revived
concerns over the euro zone debt crisis and the demand outlook
for industrial metals.
    The protests in Spain, where the government is likely to set
a fresh timetable for economic reforms later this week,
highlight the country's financing challenges and stirred doubts
among investors about whether it would have the political will
to apply for an official bailout. 
    Three-month copper on the London Metal Exchange was
down 0.8 percent at $8,210.50 per tonne by 0705 GMT, after
rising 1.1 percent in the previous session. 
    "After copper's strong gains this quarter, some
profit-taking is inevitable. With worries about Europe and Spain
in focus this week, and lingering anxiety over China's economic
growth, we see the risk of gains in Q3 turning out to be a false
dawn," said ANZ Bank's metal analyst Nicholas Trevethan.
    "We may see copper slide towards $8,000, maybe even $7,800
in the next four to six weeks," he added.
    The most active January copper contract on the Shanghai
Futures Exchange fell 30 yuan to close the session at
59,150 yuan ($9,400) per tonne.
    Traders said Shanghai copper prices were also under pressure
from weak buying interest in China ahead of the country's
National Day holiday, for which the market will be closed from
Sept. 29 to Oct. 7. 
    "Small- and medium-sized companies usually face a credit
crunch towards the end of September, when banks stop lending in
preparation for their third-quarter financial reporting," said a
Shanghai-based physical trader.
    In a sign of poor demand in the physical markets, the
discount between spot and front-month Shanghai October contract
has jumped to 400 yuan from around 80 yuan on Tuesday. 
    "It shows demand for physical copper drying up as everyone
prepares to go away for the week," said the Shanghai trader.    
   
    Still, hopes that recent stimulus measures from the United
States and the approval of large projects in China will lift the
world's two biggest economies supported metal prices. 
    U.S. home prices rose for a sixth straight month in July in
the latest sign of a sustainable housing market recovery, while
a jump in consumer confidence this month offered a harbinger
that Americans are ready to loosen their spending.
 
    China's central bank said on Tuesday it would "fine tune"
policy to cushion the economy against global risks, adding that
the country's economy had showed signs of stabilising while the
inflation trend remained stable. 
 
                                                              
  Base metals prices at 0705 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            8210.50    -64.50     -0.78      8.03
  SHFE CU FUT JAN3    59150       -30     -0.05      6.33
  LME Alum          2093.00    -12.00     -0.57      3.61
  SHFE AL FUT DEC2    15685        45     +0.29     -0.98
  HG COPPER DEC2     374.15     -1.70     -0.45      8.89
  LME Zinc          2126.25     -9.75     -0.46     15.24
  SHFE ZN FUT JAN3    15620        50     +0.32      5.58
  LME Nickel       18302.00    -98.00     -0.53     -2.18
  LME Lead          2307.00    -13.00     -0.56     13.37
  SHFE PB FUT         16100        40     +0.25      5.30
  LME Tin          21247.00   -203.00     -0.95     10.66
  LME/Shanghai arb    1409
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE 
 third month
                                                              
 ($1 = 6.3066 Chinese yuan)

 (Editing by Clarence Fernandez and Himani Sarkar)
 (carrie.ho@thomsonreuters.com; +86 21 6104 1775; Reuters
Messaging:; carrie.ho.reuters.com@reuters.net)

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