METALS-Copper nears one-week high on upbeat Chinese factory data
* China official PMI comes in at 50.3 for July
* China bonded copper premiums rise to $200 - Shmet
* Coming up: ECB decision 1145 GMT, news conference 1230 GMT
(Adds details, quotes; previous SINGAPORE) LONDON, Aug 1 (Reuters) - London copper touched its strongest level in almost a week on Thursday after upbeat Chinese and European manufacturing data plus a dovish Federal Reserve statement that sparked hope of a delay in paring U.S. stimulus measures. Data showed factory activity in China, which accounts for 40 percent of global copper demand, was slightly stronger than expected. The government's official Purchasing Managers' Index (PMI) rose to 50.3 in July from 50.1 in June, beating forecasts it would fall to 49.9. Some investors were bracing for even lower numbers, traders said. "It was certainly positive after everyone had been expecting it to be weak," said Nic Brown, head of commodities research at Natixis in London. Underlying demand for copper in China was also stronger than many investors realised, Brown added. "My sense is that the physical market is quite a bit tighter than people appreciate... There's been a 17 percent rise in copper semis (semi-fabricated) production in China so far this year, that's pretty strong." Three-month copper on the London Metal Exchange climbed 1.6 percent to a session high of $6,990 a tonne, the strongest since July 26 and was up 1.4 percent at $6,978 at 1009 GMT. Short-covering helped fuel the gains after copper shot up 2.2 percent the session before, although the metal used in power and construction is still down about 12 percent this year. The most-traded November copper contract on the Shanghai Futures Exchange rallied 2.27 percent to 50,020 yuan ($8,200) a tonne. Copper shrugged off strength in the dollar, which usually weighs on prices since it makes commodities priced in the U.S. currency more expensive to buyers in other countries.
STRONGER PHYSICAL PREMIUMS Traders said Chinese copper demand picked up this week in line with a fall in prices to three-week lows, given a shortage of feed stock scrap metal in the country, but flagged still sluggish demand overall. Physical premiums for copper in China's bonded areas are rising towards four-year highs of $210 hit around a month ago, and were last at $200 a tonne, according to China price provider Shmet. (http://www.shmet.com/) While the Chinese manufacturing data showed signs of stabilisation, there were no signs of a strong rebound, said analyst Dominic Schnider of UBS Wealth Management in Singapore. "For the second half I'd say acceleration is going to be barely visible and under those circumstances you're not going to see an attractive return on copper - once it is above $7,000 a tonne you should consider cutting positions," he added. Markets got a fillip after data showed Euro zone manufacturing activity grew for the first time in two years in July, suggesting the region may pull out of recession this quarter. Signs of a tentative euro zone recovery are expected to ease pressure on the European Central Bank to take fresh policy action when it meets later on Thursday. Markets were also supported after a statement by the Federal Reserve on Wednesday that the U.S. economy continues to recover but is still in need of support, offering no signs that it is planning to curb its bond-buying stimulus at its next meeting in September. Potentially affecting aluminium premiums, Goldman offered on Wednesday to immediately swap aluminium for any end-users holding metal at its Metro International warehouses, allowing them to avoid year-long waits and high premiums. In other metals, tin held above $20,000 per tonne after moving back above that level at Wednesday's close for the first time in nearly a month. The metal mainly used in soldering for electronics added 0.7 percent to $20,550 a tonne. "Data is expected to show a large percentage drop in tin shipments from Indonesia in July but this is in part as a result of a surge in shipments in the first half," Triland Metals said in a note.
PRICES Metal Prices at 1012 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 3.16 0.04 +1.31 365.25 -99.13 LME Alum 1822.75 18.75 +1.04 2073.00 -12.07 LME Cu 6986.25 106.25 +1.54 7931.00 -11.91 LME Lead 2109.25 39.25 +1.90 2330.00 -9.47 LME Nickel 13880.00 5.00 +0.04 17060.00 -18.64 LME Tin 20555.00 205.00 +1.01 23400.00 -12.16 LME Zinc 1864.00 21.00 +1.14 2080.00 -10.38 SHFE Alu 14270.00 75.00 +0.53 15435.00 -7.55 SHFE Cu* 50220.00 1070.00 +2.18 57690.00 -12.95 SHFE Zin 14515.00 60.00 +0.42 15625.00 -7.10 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07 ($1 6.1289 Chinese yuan)
(Additional reporting by Melanie Burton; editing by James Jukwey)