METALS-Copper gains for 3rd day, LME stocks at lowest in nearly 11 mths

Monday, 23 Dec 2013 | 10:50 PM ET

* Aluminium also firmer, zinc slips from 10-month top

LME says to push ahead with warehousing changes

* Coming Up: U.S. durable goods orders at 1330 GMT

(Adds comments, LME warehousing, updates prices)

By Manolo Serapio Jr

SINGAPORE, Dec 24 (Reuters) - London copper futures drifted higher for a third day on Tuesday, underpinned by tightness in near-term supplies amid slow trading as liquidity winds down ahead of Christmas holidays.

Copper has fallen almost 9 percent this year, reflecting slower demand from top consumer China that has helped trap prices in narrow ranges for most of the second half of 2013.

But copper has also held up quite well despite the Federal Reserve's decision last week to start ending its massive bond-buying stimulus, a major support for commodity prices for years, amid signs that the U.S. economy is on stronger footing.

"I think the future bodes well for copper," said Jonathan Barratt, head of commodity research firm Barratt's Bulletin in Sydney.

"While the unwinding of the stimulus will become a feature on the horizon, that also builds up confidence in the U.S. economy and in demand for copper," said Barratt who sees the metal heading towards $8,200 in the first half of 2014.

Three-month copper on the London Metal Exchange was up 0.2 percent at $7,256.25 a tonne by 0319 GMT, with less than 900 lots traded on LME Select.

"I look at the drawdowns, the tightness in premiums and the macroeconomic picture and I think people are trying to get in pre-Christmas and that's what's supporting the price," said Barratt.

Copper stockpiles in warehouses monitored by the London Metal Exchange stood at 379,100 tonnes <MCU-STOCKS>, the lowest level since Feb. 1, based on the latest data from the bourse.

The global refined copper market fell into a 162,000 tonnes deficit in September after posting a small surplus in August, as record-high Chinese apparent demand ate into supply, data from the International Copper Study Group showed.

The most-active copper for March delivery on the Shanghai Futures Exchange gained 0.1 percent to 51,370 yuan ($8,500) a tonne.

LME aluminium advanced half a percent to $1,769.25 a tonne after slipping to two-week lows in the previous session. LME zinc eased 0.2 percent to $2,053 a tonne after rising to a near 10-month peak of $2,071 on Monday, aided by tighter supplies and firm Chinese demand.

Lead dipped 0.2 percent to $2,226.50 after touching $2,235 overnight, its loftiest since late August.

The LME will be shut on Wednesday and Thursday for Christmas day and Boxing Day holidays.

The exchange will go ahead with planned changes to its warehousing policy aimed at addressing massive queues for metal despite top aluminium producer Rusal challenging the proposal.

The LME proposed new rules to overhaul its delivery system from next April that would force warehouses to release more stocks once the waiting time breaches 50 days.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Three month LME tin ($1 = 6.0702 Chinese yuan)

(Reporting by Manolo Serapio Jr.; Editing by Michael Perry)