METALS-Copper up on easing Greece concern, supply worry
By Silvia Antonioli
Copper inched up on Thursday to its highest in
more than two months as expectations of increasing demand from top consumer
China, supply disruption in Chile and Indonesia and easing concerns over the
Greek debt crisis boosted sentiment.
Benchmark copper on the London Metal Exchange , untraded in rings,
was bid at $9,550 a tonne by 1031 GMT from $9,521 a tonne at the close on
Earlier, the metal used in power and construction hit a session high of
$9,600 a tonne, its highest since April 21.
"The market has been bullish since the moment news spread that Greece will
be granted (loans)," said VTB Capital analyst Andrey Kryuchenkov.
"Also, copper stocks in Asia are coming off so maybe we will see some pickup
in demand from Asia."
Supply concerns were also, at least partially, supporting copper prices,
Some of the world's biggest copper mines face strike-related disruptions,
early signs of a possible resurgence in labour unrest that could strain an
already fragile supply pipeline.
In Indonesia, a strike for higher pay has paralyzed output at Freeport
McMoRan Copper & Gold's giant Grasberg mine.
In Chile, some workers at state-owned Codelco are planning a one-day
walkout, while unions in Peru called off a two-day strike at the last moment.
The outlook for copper is deemed to brighten further in the second part of
this year, according to analysts.
"We see further upside in copper prices despite the recent rally," Goldman
Sachs' said in a note.
"We expect (..) demand growth will be sufficient to substantially tighten the
copper market over the next year, especially as Chinese buyers continue to
return to the market."
The European Central Bank raised benchmark interest rates by 25 basis
points, as widely expected. This move had little impact on currencies and metals
prices as the rate hike was already priced in, analysts said.
However, copper rose slightly after data showed that U.S. private employers
added far more jobs than expected in June, bouncing back from a surprise slump
the month before.
Inventories of copper on the London Metal Exchange (LME) rose by 675 tonnes
to 461,950 tonne but were still more than 3 percent down from June 8, when they
hit their highest in about a year.
Copper stocks have also fallen in recent weeks in Asian warehouses
underlining that a pick up in demand may be underway. CU-STX-SGH.
Inventories of zinc MZN-STOCKS on the LME hit their highest in 16 years at
"The problem with zinc is that it is an badly over supplied market," said
Daniel Smith, an analyst at Standard Charted.
"Demand is not subdued but the producers have not been disciplined."
Zinc , used in galvanizing steel traded at $2,384 a tonne in official
rings from $2,380 Wednesday's close.
Battery material lead , untraded in rings, was bid at $2,703 from
$2,700. Earlier, it touched a peak of $2,719.75 a tonne, its highest since
Lead prices recovered largerly in line with copper but positive fundamentals
were also supporting the metal, analysts said.
"The long-term perspective is very positive for lead," Nic Brown, head of
commodity research at Natixis said.
"We may see an increase in demand for lead for batteries for new cars and
In the very short term however the metal may be facing headwinds such as the
closure of a significant number of lead manufactures in China due to
environmental issues, Brown underlined.
Tin traded at $27,150 from $26,745 while and aluminium
traded at $2,560 from $2,556.
Nickel traded at $23,355 from $23,380.
(Reuters) - (Additional reporting by Tasim Zahid; editing by Keiron Henderson)