METALS-Copper rebounds from 3-week low; U.S. fiscal talks in focus
* LME copper stocks hit 10-month high
* Shanghai spot copper discount widens
* Coming Up: U.S. Thomson Reuters/UMich final Dec consumer sentiment; 1455 GMT
(Adds details, comments; updates prices) SINGAPORE, Dec 21 (Reuters) - London copper rebounded on Friday, but remained near a three-week low hit in the previous session, as uncertainty whether the world's top economy could avoid an imminent fiscal calamity continued to drag. The mood of financial markets has closely followed the twists and turns in talks between the White House and Republican lawmakers to avert the "fiscal cliff", $600 billion worth of tax hikes and spending cuts set to kick in in the new year. House of Representatives Speaker John Boehner cancelled a vote on a tax bill as he failed to rally enough support from fellow Republicans, prompting a sell-off in a number of markets including crude oil, precious metals and equities.
Copper held up as it had found some support after falling to an earlier range in the previous session, said Fang Junfeng, an analyst at Shanghai CIFCO Futures. "Copper is taking a pause after having fallen sharply over the past few days as people were worried about the U.S. 'fiscal cliff'," he said. "It could be building a bottom in the range between $7,600 and $7,800." Three-month copper on the London Metal Exchange gained 0.8 percent to $7,830 a tonne by 0321 GMT, snapping a six-day losing streak. The metal is on track for its biggest weekly loss since early June, a fall of 3 percent. The most-traded March copper contract on the Shanghai Futures Exchange eased to a three-week low of 56,320 yuan, before recovering to 56,650 yuan ($9,100). The contract was headed for a drop of 1.7 percent in its biggest weekly decline in nearly two months. LME copper could end its rebound at $7,834 a tonne and fall again towards $7,661, said Reuters market analyst Wang Tao.
SHANGHAI PHYSICAL COPPER DISCOUNT WIDENS The physical demand for copper remained tepid, reflected in a widening spot discount to the front-month Shanghai futures contract. The discount widened to 340 yuan from 300 yuan on Thursday. (www.smm.cn) "It's mostly because of tight liquidity near the year end," said a Shanghai-based trader, adding that traders with some cash in hand were seeking opportunities to buy on dips. "If they see a sharp drop in prices, they will get in and buy, since in the new year they will need to replenish stockpiles anyway." LME copper stocks rose to a more than 10-month high of 311,925 tonnes by Dec. 19, but the number was 16 percent lower than a year earlier. <MCUSTX-TOTAL> LME aluminium inched up 0.2 percent to $2,063.5 a tonne but was on course for its biggest weekly loss in more than two months, with a drop of 2.8 percent. Daily global aluminium output rose in November for the second successive month, according to International Aluminium Institute (IAI) data, with output expected to grow as high premiums keep smelters profitable. Japan's aluminium premiums for January-March shipments were mostly set at $240 to $245 per tonne, down from a record <PREM-ALUM-JP> in the current quarter, sources said.
Base metals prices at 0321 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 7830.00 58.00 +0.75 3.03 SHFE CU FUT MAR3 56650 -220 -0.39 2.33 HG COPPER MAR3 355.60 2.00 +0.57 3.49 LME Alum 2063.50 3.50 +0.17 2.15 SHFE AL FUT MAR3 15235 -15 -0.10 -3.85 LME Zinc 2067.50 -3.50 -0.17 12.06 SHFE ZN FUT MAR3 15370 -05 -0.03 3.89 LME Nickel 17450.00 -125.00 -0.71 -6.73 LME Lead 2322.00 -3.00 -0.13 14.10 SHFE PB FUT 15270.00 -50.00 -0.33 -0.10 LME Tin 23201.00 -124.00 -0.53 20.84 LME/Shanghai arb^ 432
Shanghai and COMEX contracts show most active months ($1=6.2302 Chinese yuan)
(Editing by Clarence Fernandez)