METALS-Copper steady on China prospects vs dollar gains
* U.S. fiscal talks resume on Friday as Jan 1 deadline nears
* China Dec factory activity expanded at fastest in 8 months -survey
* Coming up: U.S. Chicago PMI, Dec; 1445 GMT
LONDON, Dec 28 (Reuters) - Copper was steady on Friday as signs that top consumer China's economy is improving balanced against the effects of a firm dollar and uncertainty over the outcome of a last-chance round of U.S. budget talks. The metal was also supported by reports that workers at the world's biggest copper mine, Chile's Escondida, had rejected an early pay offer, although current contracts remain in force until June next year. Three-month copper on the London Metal Exchange was almost flat at $7,920 at 1145 GMT, on course for a 1.1 percent weekly rise. It earlier hit a 1-1/2 week high of $7,955.25. "Copper has held up quite well this week considering the ever closer 'fiscal cliff' story," said Stephen Briggs, an analyst at BNP Paribas. "The single biggest reason is that it had perhaps become oversold compared with the other base metals." Copper fell almost 2 percent last week and is up just 4 percent so far this year, while three-month zinc has risen 12 percent. But there are signs the economy in China is steadily recovering, with a Reuters survey showing the country's factory activity this month probably expanded at its fastest pace in eight months. The survey showed that the official purchasing managers' index (PMI) in December, due at 0100 GMT on Jan. 1, may have hit 51.0 from November's 50.6.
"Accelerating corporate profits and infrastructure spending plans in China have given the bulls reason to believe that copper demand there will remain strong," RBC said in a research note. The most-traded April copper contract on the Shanghai Futures Exchange closed up 0.2 percent at 57,680 yuan ($9,200) a tonne, gaining 1.8 percent for the week. "Shanghai copper has been leading the gains this month thanks to renewed confidence after the leadership transition in Beijing," said Chen Dixi, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen. But Chen cautioned that the initial boom in copper demand may fade as Beijing is adamant about curbing speculative investment in the property sector and shifting the economy away from a resource-heavy pattern of development. "After all, China is trying to adjust the structure of its economy, and the global economic recovery is far from certain," Chen said.
FISCAL CLIFF In the United States, President Barack Obama and lawmakers launched a last-chance round of budget talks days before a New Year's deadline to reach a deal or watch the economy go off the so-called "fiscal cliff". Obama and Vice President Joe Biden will meet congressional leaders from both parties at the White House on Friday at 3 p.m. EST (2000 GMT) to try to revive negotiations to avoid tax hikes and spending cuts amounting to $600 billion, which begin to take effect on Jan. 1. The euro turned lower against the dollar, falling 0.35 percent to hit a session low of $1.3184, with investors cautious as they waited to see the outcome of the U.S. budget talks. A stronger dollar makes metals priced in the U.S. unit more expensive for holders of other currencies. In other metals, three-month tin was down 0.4 percent at $23,300, zinc fell 1.3 percent to $2,076, lead lost 0.4 percent to $2,326, al uminium fell 0.2 percent to $2,075 and nickel was off 0.7 percent at $17,160.
Metal Prices at 1141 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 361.05 1.40 +0.39 344.75 4.73 LME Alum 2074.00 -6.00 -0.29 2020.00 2.67 LME Cu 7916.25 1.25 +0.02 7600.00 4.16 LME Lead 2325.25 -9.75 -0.42 2034.00 14.32 LME Nickel 17158.00 -117.00 -0.68 18650.00 -8.00 LME Tin 23251.00 -149.00 -0.64 19200.00 21.10 LME Zinc 2075.75 -26.25 -1.25 1845.00 12.51 SHFE Alu 15345.00 -5.00 -0.03 15845.00 -3.16 SHFE Cu* 57580.00 130.00 +0.23 55360.00 4.01 SHFE Zin 15545.00 -40.00 -0.26 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