Copper Falls on Spanish Banking Woes-Shanghai Metals Market

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Copper Falls on Spanish Banking Woes

Industry News 10:37:44AM May 30, 2012 Source:SMM

SHANGHAI, May 29 (Reuters) - Copper slipped on Wednesday after news that Spain needed to issue new debt to recapitalise a troubled lender and the country suffered another rating downgrade, stoking worries about the euro zone's debt crisis. 

Germany's 10-year bond yield hit a fresh record low on the news, indicating a flight to safety by investors. This was despite a recent spate of announcements by Beijing on spending programmes to stimulate the economy and signs of improvement in the U.S. property market. 

Fundamentals
Three-month copper on the London Metal Exchange edged down 0.4 percent to $7,639 a tonne by 0120 GMT, after falling 0.2 percent on Tuesday. 

The most-active September copper contract on the Shanghai Futures Exchange fell 1.1 percent to 55,480 yuan ($8,700) a tonne, after losing 0.2 percent in the prior session. 

Germany's 10-year bond yield hit a fresh record low while the euro edged towards its weakest in two years on Tuesday as doubts grew over Spain's plan to recapitalise its banks and obtain finance for its struggling regional governments.

In a bid to contain its debt crisis, Spain will recapitalise nationalised lender Bankia by issuing new debt, not by injecting bonds into the lender, a government source told Reuters on Tuesday. The source added that Spain will likely adopt on Friday a new mechanism to back its regions' debt.  

Egan-Jones Ratings cut Spain's credit level yet again on Tuesday, the third downgrade from the agency in less than a month as the country's weak banks continue to worry investors.
  
As the euro zone ponders a possible Greek exit, policymakers have not yet built a shield robust enough to prevent a bank run in one country sending others in the bloc deeper into crisis.  

China plans to allocate an annual fund of up to 2 billion yuan ($315 million) from this year to help develop and mass produce energy-saving vehicles to cut carbon emissions, the government said.
 
U.S. home prices edged higher for the second month in a row in March as the housing recovery picked up traction, while gains in some of the hardest hit areas suggested the improvement was becoming more broad-based.  
          
Market News 
Asian shares slipped on Wednesday, hurt by fears that Spain's banking woes will push up the country's borrowing costs to unsustainable levels, although falls were limited on hopes that Greece would stay in the euro zone and for China stimulus steps.  

Worries over Spain's finances also pushed the euro lower on Tuesday to its weakest level versus the U.S. dollar since July 2010.  
     
DATA/EVENTS (GMT) 
0800  EZ    Money-M3 3m moving av     Apr      
0900  EZ    Business climate          May      
0900  EZ    Economic sentiment        May      
1145  U.S.  ICSC chain stores yy      Weekly   
1255  U.S.  Redbook U.S. retail sales Weekly 
1400  U.S.  Pending home sales        April 
     
                                                              
  Base metals prices at 0120 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7639.00    -31.00     -0.40      0.51
  SHFE CU FUT SEP2    55480      -600     -1.07     -0.27
  LME Alum          2020.25      4.25     +0.21      0.01
  SHFE AL FUT SEP2    16000       -30     -0.19      1.01
  HG COPPER JUL2     345.30     -0.90     -0.26      0.49
  LME Zinc          1908.25     -5.75     -0.30      3.43
  SHFE ZN FUT SEP2    14950       -70     -0.47      1.05
  LME Nickel       16686.00     36.00     +0.22    -10.82
  LME Lead          1948.00      0.00     +0.00     -4.28
  SHFE PB FUT         15200       -50     -0.33     -0.59
  LME Tin          20190.00    -10.00     -0.05      5.16
  LME/Shanghai arb    1044
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
                                                              
 ($1 = 6.3480 Chinese yuan) 
 

Copper Falls on Spanish Banking Woes

Industry News 10:37:44AM May 30, 2012 Source:SMM

SHANGHAI, May 29 (Reuters) - Copper slipped on Wednesday after news that Spain needed to issue new debt to recapitalise a troubled lender and the country suffered another rating downgrade, stoking worries about the euro zone's debt crisis. 

Germany's 10-year bond yield hit a fresh record low on the news, indicating a flight to safety by investors. This was despite a recent spate of announcements by Beijing on spending programmes to stimulate the economy and signs of improvement in the U.S. property market. 

Fundamentals
Three-month copper on the London Metal Exchange edged down 0.4 percent to $7,639 a tonne by 0120 GMT, after falling 0.2 percent on Tuesday. 

The most-active September copper contract on the Shanghai Futures Exchange fell 1.1 percent to 55,480 yuan ($8,700) a tonne, after losing 0.2 percent in the prior session. 

Germany's 10-year bond yield hit a fresh record low while the euro edged towards its weakest in two years on Tuesday as doubts grew over Spain's plan to recapitalise its banks and obtain finance for its struggling regional governments.

In a bid to contain its debt crisis, Spain will recapitalise nationalised lender Bankia by issuing new debt, not by injecting bonds into the lender, a government source told Reuters on Tuesday. The source added that Spain will likely adopt on Friday a new mechanism to back its regions' debt.  

Egan-Jones Ratings cut Spain's credit level yet again on Tuesday, the third downgrade from the agency in less than a month as the country's weak banks continue to worry investors.
  
As the euro zone ponders a possible Greek exit, policymakers have not yet built a shield robust enough to prevent a bank run in one country sending others in the bloc deeper into crisis.  

China plans to allocate an annual fund of up to 2 billion yuan ($315 million) from this year to help develop and mass produce energy-saving vehicles to cut carbon emissions, the government said.
 
U.S. home prices edged higher for the second month in a row in March as the housing recovery picked up traction, while gains in some of the hardest hit areas suggested the improvement was becoming more broad-based.  
          
Market News 
Asian shares slipped on Wednesday, hurt by fears that Spain's banking woes will push up the country's borrowing costs to unsustainable levels, although falls were limited on hopes that Greece would stay in the euro zone and for China stimulus steps.  

Worries over Spain's finances also pushed the euro lower on Tuesday to its weakest level versus the U.S. dollar since July 2010.  
     
DATA/EVENTS (GMT) 
0800  EZ    Money-M3 3m moving av     Apr      
0900  EZ    Business climate          May      
0900  EZ    Economic sentiment        May      
1145  U.S.  ICSC chain stores yy      Weekly   
1255  U.S.  Redbook U.S. retail sales Weekly 
1400  U.S.  Pending home sales        April 
     
                                                              
  Base metals prices at 0120 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7639.00    -31.00     -0.40      0.51
  SHFE CU FUT SEP2    55480      -600     -1.07     -0.27
  LME Alum          2020.25      4.25     +0.21      0.01
  SHFE AL FUT SEP2    16000       -30     -0.19      1.01
  HG COPPER JUL2     345.30     -0.90     -0.26      0.49
  LME Zinc          1908.25     -5.75     -0.30      3.43
  SHFE ZN FUT SEP2    14950       -70     -0.47      1.05
  LME Nickel       16686.00     36.00     +0.22    -10.82
  LME Lead          1948.00      0.00     +0.00     -4.28
  SHFE PB FUT         15200       -50     -0.33     -0.59
  LME Tin          20190.00    -10.00     -0.05      5.16
  LME/Shanghai arb    1044
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
                                                              
 ($1 = 6.3480 Chinese yuan)