* Copper hits one-week low on U.S. bailout concerns
* Aluminium touches 8-month trough as inventories rise
* Market nervous ahead of U.S. $700 billion rescue meeting
(Adds fresh comment/details, changes dateline PVS SHANGHAI)
By Anna Stablum
LONDON, Sept 25 (Reuters) - Copper drifted lower and
aluminium touched an 8-month trough on Thursday as most
investors were sidelined awaiting more news on a $700 billion
U.S. rescue plan designed to stabilise the banking sector.
"Markets are waiting for the rescue package, wondering what
it means for the economy," said analyst Barbara Lambrecht at
Commerzbank.
"Copper prices will continue to fall in the medium-term,
there is a slowdown in demand and there are recession risks in
the U.S. and in Europe - and this could spill over to China."
London Metal Exchange copper MCU3 hit a one-week low of
$6,835 per tonne before trading at $6,892, down $13 at 0942 GMT.
Copper, mainly used in the power and construction sectors,
has shed 24 percent since it hit a record of $8,940 in July.
"No one wants to trade anything above what they are forced
to -- it is better not to be involved in these markets -- if the
package doesn't go through Congress we could face a global
meltdown," an LME trader said.
The market is focused on U.S. Treasury and Federal Reserve
officials wrangling with the U.S. Congress to win approval for a
financial markets bailout plan, which could influence the
long-term outlook for metal consumption.
U.S. President George Bush called an emergency meeting for
Thursday to hammer out details of the deal. [ID:nLP616843]
LME copper stocks fell another 525 tonnes, but at 200,525
tonnes they are still two thirds higher than in mid-June.
"The copper market has seen lower inventories and this is
supporting prices -- but on the other hand, there is lower
demand from cable producers in the U.S.," Lambrecht said.
Rising stocks have pulled down the backwardation -- the
premium for cash material over three-month prices -- to $15 per
tonne. On July 17, the premium hit the year's high, at $241,
with a dominant position capturing most of the market.
The large position now holds between 50-to-80 percent of the
copper warrants in LME warehouses, down from 80 to 90 percent.
Aluminium MAL3 eased to $2,477 against Wednesday's close
of $2,503. Earlier the light metal, used in the power, transport
and packaging industries, fell 1.3 percent to $2,470 -- the
lowest since Jan. 25.
LME inventories have surged more than 20 percent since
mid-August to stand at 1.37 million tonnes, enough for 13 days of
world consumption. Shanghai stocks have also humped -- up 120
percent at just under 200,000 tonnes.
Lead MPB3 was down 2.2 percent or $43 at $1,952, zinc
MZN3 shed $11 to $1,779, tin MSN3 fell to $17,250 against
$17,275/17,300 and nickel MNI3 dropped $225 to $16,925.
Metal Prices at 0945 GMT
Metal Last Change Pct Move End 2007 Ytd Pct
move
LME Cu 6892.00 -13.00 -0.19 6670.00 3.33
SHFE Cu* 53440.00 -50.00 -0.09 56880.00 -6.05
LME Alum 2477.00 -26.00 -1.04 2403.00 3.08
SHFE Alu* 15510.00 105.00 +0.68 18180.00 -14.69
COMEX Cu** 312.15 0.00 +0.00 303.50 2.85
LME Zinc 1779.00 -11.00 -0.61 2370.00 -24.94
SHFE Zinc* 14265.00 15.00 +0.11 18950.00 -24.72
LME Nick 16925.00 -225.00 -1.31 26350.00 -35.77
LME Lead 1952.00 -43.00 -2.16 2550.00 -23.45
LME Tin 17250.00 -75.00 -0.43 16400.00 5.18
** 1st contract month for COMEX copper
* 3rd contact month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Additional reporting by Alfred Cang, editing by Michael
Roddy)
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