METALS-Copper up on US stimulus hopes; oversupply worries weigh
* London copper ticks up on hopes U.S. stimulus to continue
* Easing credit crunch in China underpins industrial metals
* Higher supplies to weigh on copper in longer term
(Adds details, quotes) SINGAPORE, June 27 (Reuters) - London copper edged higher on Thursday on expectations the U.S. Federal Reserve will not rush to reduce its stimulus programme and as China's credit crunch eased, but oversupply continues to weigh amid worries about demand growth. The U.S. government slashed its estimate for first-quarter economic growth, offering a cautionary note on the recovery as the Fed ponders curtailing its massive monetary stimulus.
In China, the top copper consumer, moderation in money market rates extended into a fifth day after the People's Bank of China did not drain any cash from the market, helping stocks recover some of their earlier losses. "It is something that you can hold on to plus the market is also realising that PBOC is providing a little bit more liquidity and there is no need to further sell down the market," said Dominic Schnider of UBS Wealth Management in Singapore. Three-month copper on the London Metal Exchange rose 0.3 percent to $6,752.75 a tonne by 0354 GMT. The market slid to a three-year-low of $6,602 a tonne on Tuesday. The most-traded October copper contract on the Shanghai Futures Exchange rose 0.3 percent to 48,600 yuan a tonne. Longer term, though, copper is likely to remain under pressure with slowing growth in China and expectations of a bigger global surplus. Demand from China accounts for around 40 percent of global copper consumption. "There could be some upward correction on a short term but we remain bearish on copper," said Joyce Liu, an investment analyst at Phillip Futures in Singapore. "The market was supported by talk of output disruptions but now producers are ramping up supplies at a time when there is excess supply in the market." Freeport McMoRan Copper and Gold Inc is ramping up production at its Indonesian unit, according to a company spokeswoman, six weeks after a deadly tunnel collapse at the world's No. 2 copper mine halted operations. European Central Bank president Mario Draghi reiterated on Wednesday that an ECB exit from its loose monetary policy remains distant, offering additional support for the markets.
Base metals prices at 0354 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 6752.75 17.75 +0.26 -14.86 SHFE CU FUT OCT3 48600 140 +0.29 -16.11 HG COPPER JUL3 3.06 0.02 +0.56 -16.28 LME Alum 1777.00 6.00 +0.34 -14.28 SHFE AL FUT OCT3 14270 10 +0.07 -8.93 LME Zinc 1844.50 6.50 +0.35 -11.32 SHFE ZN FUT OCT3 14395 25 +0.17 -10.34 LME Nickel 13743.00 138.00 +1.01 -19.44 LME Lead 2041.00 10.00 +0.49 -12.40 SHFE PB FUT 13900.00 5.00 +0.04 -13.40 LME Tin 19800.00 100.00 +0.51 -15.38 LME/Shanghai arb^ -226
Shanghai and COMEX contracts show most active months
(Editing by Tom Hogue)