METALS-Copper gains as China credit worries subside
* Freeport ramps up production at Indonesian mine
* Metals to remain under pressure as supply rises
* Coming next: U.S. jobless data; 1330 GMT
LONDON/SINGAPORE, June 26 (Reuters) - Copper gained some ground on Thursday as China's credit crunch eased and on expectations that the U.S. and EU central banks will not rush to reduce their stimulus programmes, though oversupply worries kept gains in check. Benchmark copper on the London Metal Exchange rose 0.5 percent to $6,771.75 a tonne by 0852 GMT. The market slid to a three-year-low of $6,602 a tonne on Tuesday. The metal, used in power and construction, has lost almost 15 percent this year. In top metals consumer China, stocks clawed back some of their recent heavy losses and cash markets steadied, but gains were capped by concerns that last week's severe cash crunch was ushering in a period of tougher funding conditions and slower economic growth. Demand from China accounts for about 40 percent of global copper consumption. "For industrial metals, China is in the driving seat and the story of the credit crunch is a bit of a problem. Today the situation has improved a bit and commodities as a whole are slightly higher. There is a bit more optimism," Credit Suisse analyst Tobias Merath said. "But we have doubts this is the start of any major rebound; we don't see the fundamentals for that, with liquidity problems in China, forward looking indicators not looking too well and a lot more supply coming in the metals markets." Copper was also supported by a downward revision on Wednesday of U.S. economic growth estimates for the first quarter, easing worries that the Federal Reserve might soon curb the massive monetary stimulus that has boosted commodity prices. European Central Bank (ECB) president Mario Draghi reiterated on Wednesday that an ECB exit from its loose monetary policy remains distant, offering additional support for the markets.
LONG-TERM VIEW In the longer term, copper is expected to remain under pressure from slowing growth in China and expectations of a bigger global surplus. "There could be some upward correction on a short-term (basis), 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, a company spokeswoman said, six weeks after a deadly tunnel collapse at the world's No. 2 copper mine halted operations. In other metals, three-month aluminium was trading at $1,774 a tonne, up 0.2 percent from Wednesday's close. China has increased orders for spot shipments of aluminium in the past week as prices in the international market have fallen close to four-year lows, dipping below the price of locally produced metal.
Metal Prices at 0853 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 3.05 0.01 +0.39 365.25 -99.16 LME Alum 1774.25 3.25 +0.18 2073.00 -14.41 LME Cu 6770.50 35.50 +0.53 7931.00 -14.63 LME Lead 2042.00 11.00 +0.54 2330.00 -12.36 LME Nickel 13760.00 155.00 +1.14 17060.00 -19.34 LME Tin 19877.00 177.00 +0.90 23400.00 -15.06 LME Zinc 1846.75 8.75 +0.48 2080.00 -11.21 SHFE Alu 14285.00 15.00 +0.11 15435.00 -7.45 SHFE Cu* 49010.00 270.00 +0.55 57690.00 -15.05 SHFE Zin 14410.00 50.00 +0.35 15625.00 -7.78 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07