METALS-Copper ends flat; strong fundamentals limit losses

* Copper buoyed by weak long-term dollar outlook

* Long Collahuasi strike may hit copper output

* Coming up: U.S. wholesale inventory data on Tuesday
(Recasts with New York closing copper price, adds New York
dateline/byline and analyst comments)

By Chris Kelly and Pratima Desai

NEW YORK/LONDON, Nov 8 (BestGrowthStock) – Copper steadied below
two-year highs by Monday’s close, bucking the negative impact
of a stronger dollar, as investors bought the industrial metal
as an inflation hedge and amid concerns over supply tightness.

Benchmark copper (CMCU3: ) on the London Metal Exchange ended
at $8,660 a tonne, unchanged from the close on Friday when the
price rallied to $8,769.50, its highest since July 2008.

At the COMEX metals division of the New York Mercantile
Exchange, copper for December delivery (HGZ0: ) rose 0.80 cent to
settle at $3.9565 per lb, away from Friday’s 27-month peak at

With spill-over support from the precious metals complex,
copper held firm in the face of a stronger dollar, as budget
problems in Ireland weighed against the euro. [USD/]

“I think the biggest factor here is that investors pretty
much have made up their minds that they’re going to buy
commodities regardless of what the dollar is doing in the short
term,” said Michael Gross, futures analyst with in Tampa, Florida.

Follow-through momentum from last week’s surprisingly
strong U.S. jobs data and the Federal Reserve’s $600 billion
bond-buying program aimed at lowing interest rates and
reinvigorating the world’s largest economy kept the red metal’s
upside intact.

U.S. bank Citi said it had raised its short- to medium-term
forecasts for base metals prices to reflect tighter
demand-and-supply dynamics and a weaker dollar.

Even a 4 percent rise in third-quarter output at some of
the world’s top copper mines failed to alter the market’s
widely held view that demand will continue to outpace
production growth.

(Graphic: )

Ratings agency Moody’s said the global base metals recovery
would continue. [ID:nWNA3919]


Additional support for copper came from a strike by union
workers at Chile’s Collahuasi, the world’s No. 3 copper mine,
which headed into a fourth day on Monday with no visible impact
on output yet as wage talks remained stalled. [ID:nN08196106]

Replacement workers have helped maintain normal mine
output, but industry sources said production could be affected
if the strike extended beyond one week. [ID:nN05111737]

The operator has not said how long it can keep operations
running with the replacement workers.


Graphic on copper supply:

Also in focus are copper exchange-traded products that give
investors exposure to physical metal. [ID:nN27567082]

The launch of a copper ETP could take a large chunk of the
metal out of an already tight market. Analysts expect the
copper market, estimated at 19 million tonnes, to be balanced
or see a small deficit this year. [MET/POLL]

Among other metals, three-month aluminum (CMAL3: ) was
untraded at the close but last bid at $2,429 a tonne from
$2,452 on Friday. Traders said news that China’s State Reserves
Bureau recently sold 95,767 tonnes of primary aluminum from its
stockpiles was weighing on prices. [ID:nTOE6A703V]

Zinc (CMZN3: ) ended down $49 at $2,479 a tonne and lead
(CMPB3: ) shed $2 to close at $2,504. Tin (CMSN3: ) was untraded at
the close but last bid at $26,595 from $26,440, while nickel
(CMNI3: ) fell $325 to $24,125.
Metal Prices at 1836 GMT
COMEX copper in cents/lb, LME prices in $/T and SHFE prices in
Metal Last Change Pct Move End 2009 Ytd
COMEX Cu 394.95 0.10 +0.03 334.65
LME Alum 2430.00 -22.00 -0.90 2230.00
LME Cu 8660.00 0.00 +0.00 7375.00
LME Lead 2510.00 4.00 +0.16 2432.00
LME Nickel 24100.00 -350.00 -1.43 18525.00
LME Tin 26500.00 60.00 +0.23 16950.00
LME Zinc 2475.00 -53.00 -2.10 2560.00
SHFE Alu 16845.00 -160.00 -0.94 17160.00
SHFE Cu* 66380.00 -670.00 -1.00 59900.00
SHFE Zin 20305.00 -590.00 -2.82 21195.00
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Editing by William Hardy and Dale Hudson)

METALS-Copper ends flat; strong fundamentals limit losses