METALS-Copper slips on European political concerns
* Euro rises after above-forecast PMI data
* Copper stocks rise to highest since December 2011
* Coming up: U.S. ISM non-manufacturing data Jan at 1500 GMT
LONDON, Feb 5 (Reuters) - Copper prices slipped on Tuesday as concerns about political stability in Italy and Spain prompted caution among investors, but falls were kept in check by a strong euro and growing confidence in the outlook for global economic growth. Benchmark copper on the London Metal Exchange traded at $8,285 in official rings, down from the close at $8,305 a tonne on Monday, when it hit a four-month intraday high of $8,346. Confidence was shaken by a corruption scandal in Spain, where Prime Minister Mariano Rajoy faces calls to resign, and political uncertainty in Italy, which holds a general election later this month. Spanish and Italian bond yields stabilised following a sell-off on Monday, but their outlook remaining volatile due to the political risks. "There are some concerns in the euro zone, and the market is looking for excuses to pause a little," said Andrey Kryuchenkov, an analyst at VTB. "Any rally (in metals markets) that is based on macro numbers alone cannot support sustained gains. We need to see more evidence of improving fundamentals," he added. Helping perceptions of the outlook for the euro zone economy, a survey on Tuesday showed that businesses were more optimistic about the future but highlighted a growing chasm between the region's economies. The data helped the euro rise against the dollar, making commodities priced in the U.S. unit cheaper for holders of other currencies. Optimism about the outlook for global growth was boosted last week when data showed U.S. factory activity quickened in January and hiring increased, while Chinese factories extended a modest rebound. Investors are likely to focus later in the session on data from the U.S. services sector for further insight into the pace of recovery in the world's largest economy.
RISING STOCKS Copper stocks in warehouses registered with the LME rose by 10,850 tonnes to 385,050, their highest level since December 2011 and up 83 percent since mid-October. Investors were closely monitoring demand indications from China, which accounts for 40 percent of refined copper demand, given that its markets will be closed next week for its New Year holiday celebrations. "In order for the LME to sustain its gains, we need to see more buying from China and some policy support. Otherwise the rally we have seen in some of the base metals will run dry," said Dominic Schnider, head of commodity research at UBS Wealth Management in Singapore. "Things are going to be quiet over Chinese New Year," he added. Reflecting a lack of interest from Chinese customers, the ShFE copper contango was trading around the widest since March last year at about 550 yuan per tonne. In other metals, three-month nickel traded at $18,650 from Monday's close of $18,725, while tin was untraded in rings, but bid at $24,940 from $24,900 Zinc traded at $2,170 a tonne from $2,185 and aluminium was at $2,117 from $2,113. Official ring prices for benchmark lead were unavailable due to technical issues at the London Metal Exchange, the exchange said. Lead traded electronically at $2,454.50 at 1309 GMT, compared to $2,440 a tonne late on Monday. A closing price for lead was also unavailable on Monday due to a technical problems.
Metal Prices at 1318 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2012 Ytd Pct
COMEX Cu 376.65 -0.20 -0.05 365.25 3.12 LME Alum 2114.25 1.25 +0.06 2073.00 1.99 LME Cu 8278.25 -26.75 -0.32 7931.00 4.38 LME Lead 2449.75 -1.25 -0.05 2330.00 5.14 LME Nickel 18626.00 -99.00 -0.53 17060.00 9.18 LME Tin 24901.00 1.00 +0.00 23400.00 6.41 LME Zinc 2172.00 -13.00 -0.59 2080.00 4.42 SHFE Alu 15150.00 -80.00 -0.53 15435.00 -1.85 SHFE Cu* 59550.00 -250.00 -0.42 57690.00 3.22 SHFE Zin 15880.00 -190.00 -1.18 15625.00 1.63 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07