LME copper steady, US data, Greek banking deal supports

SHANGHAI: LME copper was steady on Tuesday, supported by encouraging US consumer data and a bank merger in Greece that offered investors some good news from the euro zone.

The threat of a strike at the world's third largest copper mine, Indonesia's Grasberg, also underpinned sentiment.

FUNDAMENTALS

Three-month copper on the London Metal Exchange edged up 0.1 percent to $9,080 a tonne by 0113 GMT. The LME was shut for a bank holiday on Monday. LME copper had closed 0.5 percent higher in its previous session on Friday.

The most-active November copper contract on the Shanghai Futures Exchange rose 0.3 percent to 67,840 yuan per tonne, after rising 0.3 percent on Monday.

US consumer spending rose at its fastest pace in five months in July, a further sign the economy is not falling back into recession, although manufacturing activity in Texas almost stalled this month.

Stocks rallied on Monday along with oil after a merger between two major banks in Greece gave investors a rare bit of encouraging news out of Europe.

The European Central Bank cut its bond purchases last week more sharply than expected, to 6.651 billion euros, further scaling back its intervention after its renewed foray into debt markets helped stabilise Italian and Spanish yields.

Workers at Freeport-McMoRan Copper & Gold's Grasberg mine in Indonesia plan to stage a strike in coming days after talks with the company failed to resolve a pay dispute, a move that could tighten global copper supplies and lift prices.

MARKET NEWS

Safe-haven currencies like the Swiss franc stayed under pressure in Asia on Tuesday, following a solid performance in riskier assets overnight that drove commodity currencies sharply higher.

Gold regained strength on Tuesday as bargain hunting resurfaced after prices dropped more than 2 percent in the previous session, but higher equities and easing worries about recession in the United States could limit gains.

Copyright Reuters, 2011