METALS-Copper slips to near 1-month low on stimulus pullback concerns
* BoJ leaves monetary policy on hold
* ShFE markets closed for public holiday until Thursday
* Supply-side outages lend support to copper prices -AME Group
(Adds comment, detail, updates prices) SINGAPORE, June 11 (Reuters) - London copper fell to near one-month lows on Tuesday as investors worried about a suspension of fresh monetary stimulus by global central banks and the strength of Chinese demand, although supply concerns cushioned the decline. The Bank of Japan (BoJ) on Tuesday became the latest of the world's central banks to press the pause button on fiscal stimulus measures that have boosted liquidity for businesses and capital for investors to funnel into commodities. The BoJ's unchanged policy disappointed some investors who had been expecting measures such as extending the maximum duration of cheap fixed-rates funds. The news followed on from the European Central Bank last week saying it saw no need for further stimulus measures at the moment, and open discussion among U.S. Federal Reserve officials over when to start trimming asset purchases under the quantitative easing (QE) programme. "The bank of Japan is not looking to add to stimulus, the market is coming around to the view that the Fed will taper, and that is bearish for financial markets," said analyst Robin Bhar of Societe Generale in London. "This is at a time when we're moving into the slow summer period for demand. We are really trundling along the bottom of recent ranges," Bhar said. Three-month copper on the London Metal Exchange sank to its lowest since May 15, before paring losses to trade down 0.59 percent at $7,120 a tonne by 0354 GMT. While commodities prices are readjusting to the looming end of years-long fiscal stimulus by global central banks, supply-side fundamentals are returning to the fore and lending support, said Matt Fusarelli of Sydney-based consultancy AME Group. "A lot of the big production increases over the next few years are now in jeopardy because of financial pressure on miners, or environmental problems for example," he said. "The glut that was expected will now be more modest." A median of analysts polled by Reuters in April forecast the copper market to be in a 95,800-tonne surplus this year. Operations at the world's No. 2 copper mine in Indonesia, run by Freeport McMoRan Copper and Gold Inc, have been shut since a tunnel collapse last month killed 28 workers. Indonesia's only copper smelter, PT Smelting, has taken just one shipment from Freeport Indonesia after the disaster and is in talks with other suppliers. Also, India's top copper smelter is preparing to reopen, potentially adding to a short-term squeeze on concentrate supply. Reflecting a short-term shortfall in mine supply, Anglo-Australian miner BHP has agreed a rise of just around 3 percent in the fees it will pay to Japan smelters to process its copper concentrate in the second half.
But worries about demand from China, the world's top copper consumer, are expected to cap metal prices, which are down about 10 percent for the year. Risks are rising that China's economic growth will drop further in the second quarter and full-year forecasts will be cut, after weekend data showed weakness in May exports and domestic activity struggling to pick up. China's markets are shut this week until Thursday for a holiday.
Base metals prices at 0740 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 7120.00 -42.00 -0.59 -10.23 SHFE CU FUT OCT3 -- -- -- -- HG COPPER JUL3 3.21 -0.03 -0.82 -11.99 LME Alum 1911.00 -12.00 -0.62 -7.81 SHFE AL FUT SEP3 -- -- -- -- LME Zinc 1874.00 -15.00 -0.79 -9.90 SHFE ZN FUT SEP3 -- -- -- -- LME Nickel 14797.00 -98.00 -0.66 -13.26 LME Lead 2148.75 -14.25 -0.66 -7.78 SHFE PB FUT -- -- -- -- LME Tin 20578.00 -322.00 -1.54 -12.06 LME/Shanghai arb^ ---
(Editing by Himani Sarkar and Muralikumar Anantharaman)