METALS-Copper up as data signals China growth acceleration
* Softer dollar supports metals prices
* China industrial profit jumps 22.8 pct in Nov
* Coming up: U.S. jobless data; 1330 GMT
LONDON, Dec 27 (Reuters) - Copper rose to a one-week high in thin trade on Thursday, recovering from a steep fall before Christmas as Chinese corporate profit data reinforced signs of recovery in the economy of the world's top metals consumer. Benchmark copper on the London Metal Exchange was at $7,900 a tonne by 1105 GMT, up 1.3 percent from its $7,801 official price in the final ring trade of a holiday-shortened session on Monday. The metal was on track for its strongest daily increase this month. A session high of $7,945.25 was its highest since Dec. 19. Supporting prices, data from Beijing showed that profits earned by China's industrial companies jumped 22.8 percent in November from a year ago, accelerating from October's 20.5 percent. China makes up for about 40 percent of the global copper consumption. "It 's not only this one data point, we have seen a series of data releases lately that was quite encouraging. Everything points to the fact that the Chinese economy has probably hit the bottom and is now on the way to a very moderate acceleration. At least it's getting better and this is good for cyclical markets like metals," said Credits Suisse analyst Tobias Merath. "But I think this rebound has to be seen in the context of the drop that we had just ahead of Christmas. That drop was not fully justified and now market conditions are pretty thin and with a few orders you can move the market." Traders also cautioned that the thin holiday trade exaggerated the price movement, while the physical market remained sluggish. "Trading volumes in the physical market are quite slow as traders are tight on cash near the year end," said a Shanghai-based trader. "I don't see any significant change on the macroeconomic environment or policy." Helping base metals, the U.S. dollar lost some ground against a basket of other currencies, making it cheaper for holders of other units to buy dollar-priced commodities such as metals.
SLOW GROWTH U.S. budget talks remain in focus as investors wait to see if the White House and Republicans can reach a deal to avert massive tax hikes and spending cuts as the deadline is only a few days away. Failure to reach an agreement would risk tipping the U.S. economy back into recession. This is weighing on the global growth outlook and keeping industrial metals prices in check. "A recovery in the Chinese economy will likely cause moderate metals price increases but we don't see a lot of potential just because we don't see the global economy growth being strong enough to trigger a sustained uptrend in industrial metals prices," Merath added. In industry news, workers at the world's biggest copper mine, Chile's Escondida, rejected an early pay offer made by mine controller BHP Billiton BHP.AX, a union leader said on Wednesday. In other metals, aluminium was at $2,093 from its $2,092 official price on Monday. Japan's Kobe Steel will cancel a plan to build an aluminum products plant in China amid uncertainties over sales outlook to its major customers, such as Japanese automakers, the Nikkei business daily said on Tuesday. Zinc, used to galvanize steel was at $2,089 from a last bid at $2,090 o n Monday while battery material lead was at $2,325.50 f r om $2,319. Tin was at $23,425 from $23,200 and stainless steel material nickel was at $17,378 from $17,005.
Metal Prices at 1108 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 359.05 0.70 +0.20 344.75 4.15 LME Alum 2091.00 9.00 +0.43 2020.00 3.51 LME Cu 7896.25 64.75 +0.83 7600.00 3.90 LME Lead 2325.00 18.00 +0.78 2034.00 14.31 LME Nickel 17386.00 36.00 +0.21 18650.00 -6.78 LME Tin 23430.00 205.00 +0.88 19200.00 22.03 LME Zinc 2088.25 17.25 +0.83 1845.00 13.18 SHFE Alu 15350.00 50.00 +0.33 15845.00 -3.12 SHFE Cu* 57450.00 360.00 +0.63 55360.00 3.78 SHFE Zin 15585.00 95.00 +0.61 14795.00 5.34 * Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07