METALS-Copper drifts as risk appetite wanes on patchy China recovery
* LME-Shfe arbitrage buying pushes up LME volumes, supports LME price
* Uncertainty seen until National People's Congress meetings end March 14.
* Coming Up; Germany Trade balance at 0700 GMT
(Adds analyst, trader comment; updates prices) SINGAPORE, March 11 (Reuters) - London copper drifted on Monday after patchy growth indicators from top consumer China eroded the risk appetite of investors and pushed up the dollar, while modest demand from China's consumers cushioned prices. Three-month copper on the London Metal Exchange was down 0.11 percent at $7,731.25 a tonne by 0305 GMT. Gains last week marked its first higher weekly close in four. The most-traded June copper contract on the Shanghai Futures Exchange fell 0.49 percent to close at 56,470 yuan ($9,100) a tonne. "Post Lunar New year, we are definitely seeing demand pick up," said analyst Bonnie Liu of Macquarie in Shanghai. "China's macro picture is getting better but there's still a lot of uncertainty, especially on the details of the public policy to be released this week," she added. Communist Party chief Xi Jinping formally takes over as China's new president during the annual meeting of the National People's Congress which ends March 14. China's uneven economic recovery signals a looming dilemma for policymakers as official data released at the weekend showed inflation at a 10-month high in February while factory output and consumer spending were weaker than forecast.
European stock index futures signalled a flat to lower open on Monday, taking a breather from last week's sharp rally, as Italy's credit downgrade and mixed macro data from China dent investors' appetite for risky assets. Also adding pressure to metals, the dollar held an upper hand against other major currencies on Monday after remarkable growth in U.S. employment. U.S. employers added a greater-than-expected 236,000 workers to their payrolls in February and the jobless rate fell to a four-year low, offering a bright signal on the economy's health.
"U.S. data have been broadly supportive but elsewhere the picture has been less so, with lingering concerns not least in China," BNP Paribas said in a client note. "We would also point to the market's unhealthy obsession with copper, where the fundamentals on the supply side are, in our view, deteriorating."
RISING STOCKS ShFE and LME copper stocks have climbed more than 200,000 tonnes, or more than a quarter of combined total stocks so far this year, while investors have turned increasingly bearish on the metal. <MCU-STOCKS> <CU-STX-SGH> The value of the bullish wagers placed on commodities by hedge funds and other big speculators is near a 15-month low after a sharp drop this past week in bets on heating oil, gold and many other raw materials, trade data showed on Friday. Still, traders noted some China buying supporting prices, helped by a narrowing price between Shanghai and the landed cost of LME copper, which attracts a 17 percent value-added tax for imports. That has encouraged China-based traders to buy the international contract, traders said. "A bit late but they (consumers) finally came in after Lunar New Year" said a trader based in Shanghai.
PRICES Base metals prices at 0721 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 7731.25 -8.75 -0.11 -2.49 SHFE CU FUT JUN3 56470 -280 -0.49 -2.10 HG COPPER MAY3 350.50 -0.40 -0.11 -4.04 LME Alum 1959.00 -6.00 -0.31 -5.41 SHFE AL FUT JUN3 14895 -70 -0.47 -2.93 LME Zinc 1976.75 1.75 +0.09 -4.20 SHFE ZN FUT JUN3 15220 -325 -2.09 -2.09 LME Nickel 16650.00 -90.00 -0.54 -2.94 LME Lead 2210.00 -2.50 -0.11 -5.56 SHFE PB FUT 14765.00 -40.00 -0.27 -3.18 LME Tin 23750.00 -45.00 -0.19 1.50 LME/Shanghai arb^ -235
Shanghai and COMEX contracts show most active months
($1 = 6.2147 Chinese yuan)
(Editing by Tom Hogue and Muralikumar Anantharaman)