Copper Down ahead of EU Summit; China Demand Eyed

Industry News 10:28:54AM Jun 27, 2012 Source:SMM

SHANGHAI, June 27 (Reuters) - London copper dropped on Wednesday, snapping two straight days of gains, as investors shied away from riskier assets on growing conviction a European summit this week will fail to resolve the region's intractable debt crisis.

But signs top copper buyer China may be slowly restocking with prices near 2012 lows are likely to check losses.
                   
Fundamentals
Three-month copper on the London Metal Exchange fell 0.3 percent to $7,335.50 a tonne by 0126 GMT.

The most-active October copper contract on the Shanghai Futures Exchange fell 0.1 percent to 53,580 yuan ($8,400) a tonne, stretching losses to a fourth session.

European Council President Herman Van Rompuy on Tuesday released a report on closer fiscal and banking union, envisaging a euro zone treasury that would issue common debt in the medium term. But Germany, two days before the June 28-29 summit, flatly rejected the idea of common euro zone bonds.

German Chancellor Angela Merkel said Europe would not share total debt liability "as long as I live".

Spain's short-term borrowing costs nearly tripled at auction on Tuesday, underlining the country's precarious finances as it struggles against recession and juggles with a debt crisis among its newly downgraded banks.

U.S. home prices picked up in April for the third month in a row, the latest indication that a recovery in the housing market is gaining traction. But in a sign of the struggles still facing the broader economy, separate data on Tuesday showed consumer confidence fell to its lowest level in five months in June.

Copper prices are expected to be supported on indications of restocking by China due to a favorable price arbitrage.  
         
Market News
Asian shares were flat and the euro pressured on Wednesday ahead of the EU summit this week, with Germany staunchly opposed to sharing the region's debt burden.
 
DATA/EVENTS (GMT)
0600  Germany  Import prices 
1230  U.S.     Durable goods orders                
1230  U.S.     Chicago Fed Midwest Manufacturing Index
1400  U.S.     Pending home sales 
  
                                                              
  Base metals prices at 0126 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7335.50    -23.50     -0.32     -3.48
  SHFE CU FUT OCT2    53580       -40     -0.07     -3.69
  LME Alum          1847.25      2.25     +0.12     -8.55
  SHFE AL FUT OCT2    15040       -25     -0.17     -5.05
  HG COPPER JUL2     330.80     -0.50     -0.15     -3.73
  LME Zinc          1778.00      2.00     +0.11     -3.63
  SHFE ZN FUT OCT2    14230       -85     -0.59     -3.82
  LME Nickel       16300.00     25.00     +0.15    -12.88
  LME Lead          1769.00      1.00     +0.06    -13.07
  SHFE PB FUT         14400       -80     -0.55     -5.82
  LME Tin          18560.00      0.00     +0.00     -3.33
  LME/Shanghai arb     726
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
 ($1 = 6.3629 Chinese yuan)
 

Copper Down ahead of EU Summit; China Demand Eyed

Industry News 10:28:54AM Jun 27, 2012 Source:SMM

SHANGHAI, June 27 (Reuters) - London copper dropped on Wednesday, snapping two straight days of gains, as investors shied away from riskier assets on growing conviction a European summit this week will fail to resolve the region's intractable debt crisis.

But signs top copper buyer China may be slowly restocking with prices near 2012 lows are likely to check losses.
                   
Fundamentals
Three-month copper on the London Metal Exchange fell 0.3 percent to $7,335.50 a tonne by 0126 GMT.

The most-active October copper contract on the Shanghai Futures Exchange fell 0.1 percent to 53,580 yuan ($8,400) a tonne, stretching losses to a fourth session.

European Council President Herman Van Rompuy on Tuesday released a report on closer fiscal and banking union, envisaging a euro zone treasury that would issue common debt in the medium term. But Germany, two days before the June 28-29 summit, flatly rejected the idea of common euro zone bonds.

German Chancellor Angela Merkel said Europe would not share total debt liability "as long as I live".

Spain's short-term borrowing costs nearly tripled at auction on Tuesday, underlining the country's precarious finances as it struggles against recession and juggles with a debt crisis among its newly downgraded banks.

U.S. home prices picked up in April for the third month in a row, the latest indication that a recovery in the housing market is gaining traction. But in a sign of the struggles still facing the broader economy, separate data on Tuesday showed consumer confidence fell to its lowest level in five months in June.

Copper prices are expected to be supported on indications of restocking by China due to a favorable price arbitrage.  
         
Market News
Asian shares were flat and the euro pressured on Wednesday ahead of the EU summit this week, with Germany staunchly opposed to sharing the region's debt burden.
 
DATA/EVENTS (GMT)
0600  Germany  Import prices 
1230  U.S.     Durable goods orders                
1230  U.S.     Chicago Fed Midwest Manufacturing Index
1400  U.S.     Pending home sales 
  
                                                              
  Base metals prices at 0126 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7335.50    -23.50     -0.32     -3.48
  SHFE CU FUT OCT2    53580       -40     -0.07     -3.69
  LME Alum          1847.25      2.25     +0.12     -8.55
  SHFE AL FUT OCT2    15040       -25     -0.17     -5.05
  HG COPPER JUL2     330.80     -0.50     -0.15     -3.73
  LME Zinc          1778.00      2.00     +0.11     -3.63
  SHFE ZN FUT OCT2    14230       -85     -0.59     -3.82
  LME Nickel       16300.00     25.00     +0.15    -12.88
  LME Lead          1769.00      1.00     +0.06    -13.07
  SHFE PB FUT         14400       -80     -0.55     -5.82
  LME Tin          18560.00      0.00     +0.00     -3.33
  LME/Shanghai arb     726
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
 ($1 = 6.3629 Chinese yuan)