METALS-Copper recovers from Italy vote on Bernanke, U.S data
* Bernanke defends ultra-loose monetary policy
* U.S. housing, confidence data better than expected
* Italy election stalemate raises debt crisis fears
LONDON, Feb 26 (Reuters) - Copper edged up on Tuesday as upbeat U.S. housing and consumer confidence data offset worries about a deadlocked Italian vote, and as investors were relieved to hear the Federal Reserve defend its ultra-loose monetary policy. At 1551 GMT, benchmark three-month copper on the London Metal Exchange (LME) traded up 0.34 percent at $7,862 a tonne, bringing losses for the year to just under 1 percent. The metal earlier hit a two-month low of $7,785 a tonne. Federal Reserve Chairman Ben Bernanke's congressional testimony earlier strongly defended the U.S. central bank's bond-buying stimulus, and also urged lawmakers to avoid sharp spending cuts set for Friday. Meanwhile, U.S. data showed new home sales jumped to 4-1/2 year highs in January while home prices in December rose a more than expected 0.9 percent in December. Data also showed consumer confidence rebounded strongly in February.
Limiting gains in copper, however, was concern about an escalation of the euro zone's debt crisis following the deadlocked Italian election result, as well as weak demand from China, which consumes some 40 percent of the world's copper.
"The outcome of the Italian election comes at a time when the market was already selling off as investors have been taking profit from the January rally," said Andrey Kryuchenkov, analyst at VTB Capital. "Open interest for copper is shrinking as people close out long positions, with little indication of buying activity coming out of China at the moment." Demand from China has remained subdued following the Lunar New year holiday, disappointing investors who had banked on quick buying from the world's top copper consumer on its return to the market. Added to this, Italy, Europe's third-largest economy, faces a dangerous vacuum after elections in which no group won, while the U.S. economy might face serious headwinds if the authorities there fail to agree a budget before this Friday's deadline. "Between the uncertainties coming out of Italy and the lack of progress on the U.S. budget talks, we suspect investors will likely move to the sidelines, removing the buying power that has been powering most markets higher over much of February," said INTL FC Stone analyst Ed Meir in a note.
TREATMENT CHARGES In industry news, zinc miners and smelters are negotiating this week in Mexico over the year's processing fees to turn zinc concentrate into refined metal. The annual benchmark for zinc treatment charges, which is generally settled around this time, was at $191 per tonne last year, with smelters expected to win higher fees. "Treatment charges $30 higher than last year would not be disappointing. The market is smaller and less liquid, also because all the Chinese concentrate is staying in China. This should lead to bigger swings going forward," said an official at Swedish miner Boliden AB. Benchmark zinc was up 0.14 percent at $2,092 a tonne, while aluminium traded down 0.99 percent at $2,017 a tonne, having earlier hit its lowest since late November last year at $2,010 a tonne. Three-month tin edged up 0.45 percent at $23,240 a tonne, nickel dipped 0.29 percent at $16,657 a tonne, having earlier hit its lowest since late November at $16,465 a tonne; and lead rose 0.33 percent to $2,300.50 a tonne. Metal Prices at 1557 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2009 Ytd Pct
COMEX Cu 355.75 1.45 +0.41 334.65 6.31 LME Alum 0.00 -2037.00 -100.00 2230.00 -100.00 LME Cu 7870.00 35.00 +0.45 7375.00 6.71 LME Lead 2285.00 -8.00 -0.35 2432.00 -6.04 LME Nickel 16575.00 -130.00 -0.78 18525.00 -10.53 LME Tin 0.00 -23135.00 -100.00 16950.00 -100.00 LME Zinc 2088.00 -1.00 -0.05 2560.00 -18.44 SHFE Alu 14810.00 -45.00 -0.30 17160.00 -13.69 SHFE Cu* 57110.00 -140.00 -0.24 59900.00 -4.66 SHFE Zin 15540.00 -10.00 -0.06 21195.00 -26.68 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07