FRX: Copper at 3-week low as stocks rise, Fed steady
* Copper down as inventories at highest since mid-May
* Fed sends base metals lower, U.S. homes data and G20 eyed
(Adds official prices)
By Michael Taylor
LONDON, Sept 24 (Reuters) - Copper slipped to a three week low on Thursday, as demand worries dogged investors after inventory levels jumped and the Federal Reserve's statements on the U.S. economy and interest rates failed to boost sentiment.
Copper for three month delivery on the London Metal Exchange was untraded in official rings, but bid at $6,090 a tonne from $6,126 at the close on Wednesday. The metal, used in power and construction, earlier touched $6,030, its lowest level since Sept. 2.
On Wednesday the U.S. Federal Reserve promised to keep interest rates low for a long time and upgraded its assessment of the U.S. economy.
But analysts said investors expected more reassurance and remained cautious on the global economic recovery, with U.S. jobs and home sales data eyed later, as world leaders meet at the G20 summit.
"The Fed left people a little bit nonplussed," said David Thurtell, an analyst at Citigroup. "Maybe people were hoping they would say things were rosy again."
He added that LME stocks in the red metal, which jumped 8,925 tonnes to 340,875 tonnes, helped pressure prices lower.
Import numbers from China, the world's largest metals consumer, were also important to metals investors.
Data earlier this week showed China's refined copper imports fell 25 percent in August from the previous month but were still the seventh highest inflow on record.
"China's refined copper and aluminium imports for August fell again and generated concerns that stronger OECD demand will not come in time to offset the slowdown in Chinese imports," ANZ said in a note.
HARD LABOUR
Labour negotiations were also on investors' radar, with Union workers at Chile's Spence copper mine likely to reject BHP Billiton's collective contract offer and vote to strike in coming days.
Adding to Thursday's overall poor sentiment, a firmer U.S. currency made metals priced in dollars more expensive for holders of other currencies. Equity and oil markets drifted lower.
In other base metals, aluminium fell to more than a one week low at $1,842 but then traded at $1,864 from $1,873. LME stocks in the metal, used in transport and packaging, fell 5,575 tonnes to remain at record levels toward 4.6 million tonnes.
Steel making ingredient nickel traded at $17,605 from $17,875 while battery material lead was untraded in official rings, but bid at $2,220 from $2,240.
"The general belief is that most people have missed the risk rally," said Citigroup's Thurtell. "That's why you are seeing dips pretty well supported."
Zinc traded at $1,913.50 a tonne from $1,903 and tin eased to $14,525 in rings versus $14,650.
A dominant position holding more than 90 percent of stock warrants and cash contracts in tin has pushed up the premium for cash material over the three-month future to near five year highs of about $700 a tonne.
Metal Prices at 1212 GMT Metal Last Change Percent Move End 2008 Ytd Percent
move COMEX Cu 274.75 -4.90 -1.75 139.50 96.95 LME Alum 1860.00 -13.00 -0.69 1535.00 21.17 LME Cu 6095.00 -31.00 -0.51 3060.00 99.18 LME Lead 2220.00 -20.00 -0.89 999.00 122.22 LME Nickel 17580.00 -295.00 -1.65 11700.00 50.26 LME Tin 14500.00 -150.00 -1.02 10700.00 35.51 LME Zinc 1905.00 2.00 +0.11 1208.00 57.70 SHFE Alu 14875.00 0.00 +0.00 11540.00 28.90 SHFE Cu* 48210.00 -10.00 -0.02 23840.00 102.22 SHFE Zin 15150.00 30.00 +0.20 10120.00 49.70 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Michael Taylor; Editing by Anthony Barker)
