FX: METALS-Copper slides as Chile quake impact overdone
MARKETS-METALS (UPDATE 4)
* Euro-dollar movements offer base metals direction
* European sovereign debt worries linger
* Coming up: US pending home sales data at 1500 GMT
(Recasts lead, adds detail, updates official prices)
By Michael Taylor
LONDON, March 4 (Reuters) - Copper fell almost 2 percent on Thursday, as analysts said supply worries after the earthquake in top producer Chile had been overdone, while sovereign debt concerns supported the dollar.
Benchmark copper for three-month delivery on the London Metal Exchange fell to $7,525 a tonne from $7,580 at the close on Wednesday and compared with a session low at $7,445.
"Perhaps the market has feared that the damage caused by the earthquake in Chile last weekend, was more severe than it turns out," said Peter Fertig, a consultant at Quantitative Commodity Research.
Copper prices hit five-week peaks on Monday after Chile temporarily shut down nearly a quarter of its mine capacity.
For more on the Chile quake and aftermath, see or Supply worries appear to be easing slightly, as Codelco,, the world's top copper miner, said it was exporting normally after Saturday's quake, and Anglo American said affected copper mining operations were able to resume full production by Wednesday.
The red metal, used in power and construction, rose as high as $7,634 on Wednesday, its highest since Jan. 11, also helped by a weaker dollar. A weak U.S. currency makes metals priced in dollars less expensive for holders of other currencies.
On Thursday, the dollar recovered some of its earlier losses as the European Central Bank held interest rates at a record low of 1.0 percent.
Investors are also eyeing economic indicators from data due in the United States, including jobless and pending home sales numbers from 1330 GMT.
"There is some risk to the downside, which relates very heavily on the development of the euro against the U.S. dollar," said Quantitative's Fertig on copper prices going forward.
"How the situation in Greece and the other Southern European countries, which have also come under attack from speculators for their budget deficits (develops) ... will also be critical for base metals."
FUND CASH QUESTIONS
A combination of Chinese buying, improving macro data, a weak dollar and fund buying, all helped copper prices soar 140 percent last year.
"They have been looking quite strong," said William Adams, an analyst at BaseMetals.com on industrial metal prices in recent sessions. "The key is whether the strength we've seen this week, is on the back of fund allocation money coming in, which is often the case at the beginning of the month.
"If it's just the case of that, once the money has been allocated, we might go through a bit of a lean patch and prices are likely to pull back."
Many analysts are also concerned however, that Chinese moves to further tighten monetary policy, cooling rapid growth, will slow the country's metals demand. China is the world's largest metals consumer.
Traders also continue to keep a watchful eye on stock movements, for clues on demand outside China. The latest data showed stocks fell 6,350 tonnes to total 544,225 tonnes -- remaining near six-year highs.
Aluminium traded at $2,233 in LME rings versus $2,210. LME stocks for the metal, used in transport and packaging, slipped 5,975 tonnes to 4.5 million tonnes.
Steel-making ingredient nickel was untraded but last bid at $22,950 from $22,845 while tin was last bid at $17,625 from a last bid on Wednesday at $17,350.
Tin earlier hit a one-month high of $17,850, while nickel touched $23,040, a level not seen since June 2008.
Battery material lead was untraded in LME rings but bid at $2,220 from $2,238.50, while zinc traded at $2,316 a tonne from $2,320.
For the latest on miner Kazakhmys, see.
Metal Prices at 1313 GMT Metal Last Change Percent Move End 2009 Ytd Percent
move COMEX Cu 340.00 -1.90 -0.56 332.75 2.18 LME Alum 2228.00 18.00 +0.81 2230.00 -0.09 LME Cu 7516.00 -64.00 -0.84 7375.00 1.91 LME Lead 2219.00 -19.50 -0.87 2432.00 -8.76 LME Nickel 22890.00 45.00 +0.20 18525.00 23.56 LME Tin 17475.00 350.00 +2.04 16950.00 3.10 LME Zinc 2308.00 -12.00 -0.52 2560.00 -9.84 SHFE Alu 16685.00 5.00 +0.03 17160.00 -2.77 SHFE Cu* 59320.00 -140.00 -0.24 59900.00 -0.97 SHFE Zin 18190.00 100.00 +0.55 21195.00 -14.18 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Editing by James Jukwey)
