METALS-Copper consolidates after fiscal cliff progress
* Battle in aluminium sparks stock deliveries
* Tin rises to highest in 8-1/2 months
* Any rallies curtailed by lack of risk appetite - analyst
LONDON, Dec 18 (Reuters) - Copper consolidated gains on Tuesday, following a one month rise, as progress in negotiations to avert the U.S. fiscal cliff eased fears the world's biggest economy could tip into recession. The prospect of a deal to head off automatic spending cuts and tax hikes may already be partly priced into the copper market, which has gained about 6 percent since mid-November, compared with falls of about 1 percent in spot gold and 2.5 percent in Brent crude oil. Many markets rallied as news emerged on Monday night that differences over resolving the fiscal cliff narrowed significantly as President Barack Obama made a counter-offer to Republicans that included a major change in position on tax hikes for the wealthy. But three-month copper on the London Metal Exchange slipped 0.2 percent to $8,045.24 per tonne at 1551 GMT, giving up gains in morning trading. Copper closed nearly flat on Monday. "The equities reacted favourably last night to this in New York and logically one would assume that this would be a positive for commodities as well," said Stephen Briggs, metals strategist at BNP Paribas in London. "But because base metals have been faring pretty well in the last few weeks, there may be less mileage for them, than there might be for some other sectors." Copper has also been boosted in recent weeks on signs of a revival in economic growth in top consumer China, which accounted for 40 percent of refined demand last year.
Further support was expected following the approval on Monday by U.S. regulators of JPMorgan Chase & Co's controversial plan to launch a copper exchange-traded fund backed by actual metal stockpiles. Stocks for the ETF will be held in non LME-registered warehouses, where costs are cheaper, with Shanghai one of the suggested locations. But the boost from the announcement could take some time to be felt in the market. "We could still be some months away from the prospectuses being posted out and investors starting to buy, so it looks a bit of a slow burner," Robin Bhar, analyst at Societe Generale, said. Bhar added that investors were sitting out until the fiscal cliff impasse was resolved, but remained optimistic for next year. "The rally for the moment is probably curtailed by a lack of any risk appetite until the fiscal cliff gets sorted out." "The prospects for next year are looking pretty good. China is rebounding and if the fiscal cliff can be resolved quickly... everything bodes well for a continued recovery in the U.S.," he said.
ALUMINIUM BATTLE A battle in aluminium on the LME between a major long holder and shorts sparked hefty deliveries of stocks into warehouses, which erased heavy premiums for cash material seen in recent days. Cash spiked to a premium of up to $47 a tonne over the benchmark three month contract on Monday, the strongest since Feb. 2007, but flipped to a discount of $15 on Tuesday. Analysts said the move back into its usual contango structure where cash prices are lower than longer dated ones after short holders delivered aluminium into LME warehouses. LME aluminium stocks have jumped by 64,325 tonnes over the past two days. "There are millions of tonnes of unreported inventory of aluminium that have built up in the last five years so there's plenty of scope for more material to hit the market," Briggs said. The increase in LME stocks appeared to weigh on three-month aluminium, which fell 0.3 percent to $2,099 per tonne in official trading. Other metals fared better. Tin, which many analysts expect to be the only base metal with a deficit next year, gained 0.6 percent to $23,450 per tonne at 1535 GMT after touching a intraday peak of $23,500, the highest in 8-1/2 months. Zinc rose to a 2-1/2 month high of $2,107 a tonne, up 0.8 percent on Monday's close. Lead added 0.4 percent to $2,308.25 a tonne and nickel climbed 1 percent to $17,783.
Metal Prices at 1532 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2011 Ytd Pct
COMEX Cu 364.70 -0.75 -0.21 344.75 5.79 LME Alum 2092.00 -13.50 -0.64 2020.00 3.56 LME Cu 8029.50 -30.50 -0.38 7600.00 5.65 LME Lead 2305.00 9.00 +0.39 2034.00 13.32 LME Nickel 17727.00 122.00 +0.69 18650.00 -4.95 LME Tin 23377.00 77.00 +0.33 19200.00 21.76 LME Zinc 2079.00 -11.00 -0.53 1845.00 12.68 SHFE Alu 15300.00 -105.00 -0.68 15845.00 -3.44 SHFE Cu* 57880.00 -250.00 -0.43 55360.00 4.55 SHFE Zin 15545.00 -80.00 -0.51 14795.00 5.07 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07