* LME copper stocks rise to 10-month high
* US copper speculators raise net longs to highest since Aug
2011
* LME copper may fall to $7,757 – technicals
(Adds comments; updates prices)
By Rujun Shen
SINGAPORE, Dec 24 (Reuters) – London copper edged up on
Monday, after posting its biggest weekly drop in more than six
months, while uncertainty about the U.S. fiscal talks and slim
trading interest as the year-end holidays draw near kept prices
trapped in a tight range.
Negotiations to avert $600 billion worth of tax hikes and
spending cuts due to take effect in the new year dragged on with
some U.S. lawmakers voicing concerns on Sunday that the country
would go over “the fiscal cliff” in nine days and some
Republicans charging that was President Barack Obama’s goal.
But risk assets mostly held steady as markets opened for the
last trading week of the year, as investors still held out hopes
that the White House and Republican lawmakers will reach an
agreement to prevent the world’s top economy from slipping into
another recession.
“It is basically politicking between the two parties, and at
the end of the day they will make a deal,” said Zhu Bin, an
analyst at Nanhua Futures in the eastern Chinese city of
Hangzhou. “But the uncertainty over the course of the
negotiation has caused lack of confidence among investors.”
He added that improving global economy would help lift
copper in the first half of 2013, but supply growth would
outpace the increase in demand and weigh on prices in late 2013.
Three-month copper on the London Metal Exchange
edged up 0.3 percent to $7,854.50 a tonne by 0702 GMT, after
losing nearly 3 percent in the previous week – its steepest
weekly drop since early June. Prices had been moving in a $46
range in Asian trading hours.
Technical analysis suggested that LME copper could fall to
$7,757 during the day as a weak rebound from last Thursday’s low
of $7,735 seems to have ended, said Reuters market analyst Wang
Tao.
The most-traded March copper contract on the Shanghai
Futures Exchange closed up 0.2 percent to 56,850 yuan
($9,100) a tonne.
The discount in Shanghai physical copper to front-month
Shanghai copper futures contract narrowed 60 yuan to 280
yuan a tonne, but buying interest was sluggish as many traders
faced tightened liquidity at the year end, traders said.
LME copper stocks rose to 312,400 tonnes by
Dec. 20, the highest level since mid-Feb, but had fallen nearly
16 percent from a year earlier.
Speculators raised their net length in U.S. copper to 24,531
contracts in the week ended Dec. 18, the highest since August
2011, data from the U.S. Commodity Futures Trading Commission
showed.
Base metals prices at 0702 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7854.50 23.00 +0.29 3.35
SHFE CU FUT MAR3 56850 110 +0.19 2.69
HG COPPER MAR3 356.85 0.15 +0.04 3.86
LME Alum 2088.75 6.75 +0.32 3.40
SHFE AL FUT MAR3 15280 20 +0.13 -3.57
LME Zinc 2079.25 -2.75 -0.13 12.70
SHFE ZN FUT MAR3 15490 105 +0.68 4.70
LME Nickel 17360.00 10.00 +0.06 -7.22
LME Lead 2299.00 -8.00 -0.35 12.97
SHFE PB FUT 15260.00 -20.00 -0.13 -0.16
LME Tin 23148.00 -77.00 -0.33 20.56
LME/Shanghai arb^ 429
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 6.2286 Chinese yuan)
(Editing by Himani Sarkar)
