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METALS-Copper hits one-month low as debt woes weigh
July 25, 2012 / 3:31 AM / 5 years ago

METALS-Copper hits one-month low as debt woes weigh

 (Adds detail, updates with closing prices)
 * Copper hits lowest since June 28 at $7,344.25 a tonne
 * Light consumer buying seen; funds trading range -trader
 * Coming up: German IFO business climate at 0800 GMT
 By Melanie Burton
 SINGAPORE, July 25 (Reuters) - London copper fell to a
one-month low on Wednesday as renewed worries over Greek and
Spanish sovereign debt hit risk appetite and curbed expectations
on metals demand, before erasing some losses alongside the euro.
 Soaring borrowing costs for Spain and concerns that Greece
may not meet its bailout terms fueled jitters about the euro
zone, knocking fragile confidence after a report showed an
improving economic picture in China on Tuesday.
 China is the world's top consumer of copper, accounting for
40 percent of refined demand last year. A report on Tuesday
showed the country's manufacturing output in July grew at its
fastest pace in nine months, which helped briefly improve
sentiment towards metals. 
  "People are still shifting their thinking to accept less
than double digit growth from China. We do know that Chinese
demand has slowed, but it's certainly not a negative outlook for
copper," said Matt Fusarelli, analyst at Australia-based
consultancy AME Group.
 "The catalysts just aren't here for another short-term price
rally ... But we do expect prices to recover towards the later
part of the year," he added.
 China's economy is set for a soft landing even as global
headwinds increase, the International Monetary Fund said in a
report on Wednesday that urged further reform and currency
appreciation to rebalance growth and reduce risks.
 
 Three-month copper on the London Metal Exchange 
traded at $7,375 at 0705 GMT, down 0.57 percent from the
previous session, when it logged a small advance. Prices earlier
fell to $7,344.25 a tonne, the lowest since June 27, and are
down nearly 3 percent for the year.
 The most-traded November copper contract on the Shanghai
Futures Exchange closed down 1.6 percent at 53,630 yuan
($8,400) a tonne.
 Investors continued to give the euro and risk currencies a
wide berth on Wednesday following a selloff in global stocks as
worries on Europe festered, though the euro was off its intraday
lows.  
 Spain paid the second highest yield on short-term debt since
the birth of the euro at an auction on Tuesday, and EU officials
said Greece had little hope of meeting the terms of its bailout,
casting fresh doubt on its future in the euro zone.
 
 A softer dollar makes commodities less expensive for holders
of other currencies.
 On Wednesday, volumes for LME copper were solid with more
than 8,000 lots changing hands, suggesting bargain hunters were
coming in to support prices.
 "There has been various bits of consumer buying first thing
but only light. The main buyers seem to be CTAs and hedge funds
trading the range," a Singapore based trader said.
 In industry news, LME shareholders decide on Wednesday
whether to accept a $2.2 billion offer by the Hong Kong stock
exchange for the 135-year-old institution. 
 A survey published by Reuters on Monday with responses from
38 of the banks, funds and industrial users entitled to vote --
more than half of the total -- showed that most of those who had
reached a decision would vote yes to a sale of the exchange at
an extraordinary general meeting. 
PRICES    
 
  Base metals prices at 0705 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7375.00    -42.00     -0.57     -2.96
  SHFE CU FUT NOV2    53630      -870     -1.60     -3.13
  HG COPPER SEP2     334.45     -0.85     -0.25     -2.66
  LME Alum          1871.75      2.75     +0.15     -7.34
  SHFE AL FUT NOV2    15245      -130     -0.85     -3.79
  LME Zinc          1798.00      1.00     +0.06     -2.55
  SHFE ZN FUT NOV2    14380      -180     -1.24     -2.81
  LME Nickel       15570.00   -180.00     -1.14    -16.78
  LME Lead          1842.75    -17.25     -0.93     -9.45
  SHFE PB FUT      14705.00   -175.00     -1.18     -3.79
  LME Tin          17175.00   -350.00     -2.00    -10.55
  LME/Shanghai arb^    1231
 
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
 
($1 = 6.3858 Chinese yuan)

 (Reporting by Melanie Burton; Editing by Richard Pullin and
Joseph Radford)
 
 

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