METALS-Copper Steady, but Demand Doubts Weigh

NEW YORK/LONDON, Aug 23 (Reuters) –

Copper firmed slightly on
Monday as investors weighed small gains in U.S. equity markets and
slightly improved regional manufacturing data with a decline in
the euro, but many players remained sidelined waiting for upcoming
economic news for direction.

Benchmark copper on the LME CMCU3 ended nearly even at
$7,255 a tonne in kerb trading. The closing bid on Friday of the
metal used in power and construction was $7,252 a tonne.

Copper for September delivery HGU0 on the COMEX metals
division of the New York Mercantile Exchange gained 0.05 cent to
finish at $3.2915 per lb, after dealing between $3.2710 and
$3.3130.

"It looks like the market has consolidated," said Jeff
Pritchard, analyst with Altavest Worldwide Trading in Mission
Viejo, California.

Pritchard added that copper prices failed to break below the
200-day moving average for the September Comex contract last
Friday and on Aug. 12 when prices fell sharply after a slew of
weak economic readings.

The 200-day moving average for September copper was at $3.2348
a lb on Monday, according to Reuters data.

U.S stocks were little changed on Monday, with gains from
utilities sector stocks offset by slides in technology stocks.

Also weighing on metals, the dollar resumed gains as the euro
slipped on Monday. The euro lost steam as new euro zone data added
concerns over the state of the economy. [USD/]

A strong dollar makes dollar-priced metals costly for European
investors.

"European shares have helped today, (but) if we see a further
increase in the dollar, this is a negative sign," said Daniel
Briesmann, analyst at Commerzbank.

"We expect further falls in base metals in the short term
mainly because of further poor economic data and a further
slowdown in imports from China," he added.

Traders are anticipating results from Tuesday's Existing Home
Sales data and Friday's GDP numbers for implications of copper's
demand outlook. Copper prices could slide if Tuesday's numbers
show a decline in housing sales.

The U.S. Chicago Fed national activity index USCFNA=ECI rose
to zero in July, indicating that the national economy was
expanding at historical trends in that month. 

WRONG-FOOTED

News that China's imports of refined copper rose 6 percent in
July from a month earlier offered some support. It was the first
increase in four months thanks to arrivals of contracted spot
cargoes.

Traders expect this to be a new trend and cite rising
cancelled warrants -- material earmarked for delivery -- on copper
stocks in LME warehouses.

Copper stocks stand at 402,200 tonnes, down more than 20
percent since the middle of February. Stocks of aluminium, used in
transport and packaging, at 4.46 million tonnes compared with a
record above 4.64 million tonnes in January.

Traders were also watching the premium or backwardation on
London Metal Exchange aluminium to be delivered on Tuesday and
bought back on Wednesday -- known as the tom/next and often used
to lend metal to entities that are short.

 Large inflows of aluminium into LME warehouses on Monday and
Tuesday last week -- more than 91,000 tonnes -- were partly due to
the tom/next premium -- at around $4 a tonne. CMALT-0

The backwardation has emerged because of two significant
positions holding between 30 and 40 percent of aluminium stock
warrants and cash contracts. <LME/WC>

"There are some parties caught short of material," a trader
said, adding that he thought the situation was temporary.
 

Worries about tin supplies from Indonesia pushed the cash to
three-month premium to around $200 a tonne last week compared with
a discount of $63 late June. It is now around $100 a tonne.

Three-month aluminium CMAL3 was last bid at $2,040 a tonne,
unchanged from Friday. Lead ended CMPB3 at $2,048 a tonne from
$2,056. Tin CMSN3 ended at $20,460 from $20,650 and nickel
CMNI3 at $21,200 from $21,550.
Zinc CMZN3 ended at $2,044 from Friday's last bid at
$2,058.
Metal Prices at 1615 GMT Comex copper in cents/lb, LME prices
in $/T and SHFE prices in yuan/T
 Metal Prices at 1949 GMT
 Metal            Last      Change  Pct Move    End 2009          Ytd Pct
                                                         move
 COMEX Cu       328.90       -0.20     -0.06     334.65           -1.72
 LME Alum      2040.00        0.00     +0.00    2230.00          -8.52
 LME Cu        7270.00      -39.00     -0.53    7375.00           -1.42
 LME Lead      2045.00      -11.00     -0.54    2432.00         -15.91
 LME Nickel   21150.00     -400.00     -1.86   18525.00     14.17
 LME Tin      20500.00     -150.00     -0.73   16950.00        20.94
 LME Zinc      2040.00      -50.00     -2.39    2560.00          -20.31
 SHFE Alu     15330.00       20.00     +0.13   17160.00       -10.66
 SHFE Cu*     57190.00      140.00     +0.25   59900.00     -4.52
 SHFE Zin     16920.00      -30.00     -0.18   21195.00         -20.17