July 30, 2010 – * Falls in equities weigh, market awaits data
* Shanghai copper stocks down, LME inventories up
* Coming up: U.S. Q2 gross domestic product; 1230 GMT
(Recasts, updates prices and comments, previous SHANGHAI)
By Humeyra Pamuk
LONDON, July 30 (Reuters) - Copper slipped on Friday, dragged down by falling equities and as investors await key U.S. data, which is expected to give more clues about the health of the major metals consumer.
An improvement in risk appetite over the past couple of weeks has offset uninspiring economic data from the United States and helped copper prices, which are on course for their biggest monthly gain since last August.
European shares edged down with concerns over U.S. economic growth and downbeat comments from a Federal Reserve official prompting investors to stay cautious. Chinese stocks, which copper tends to follow, ended lower.
Copper for three-months delivery on the London Metal Exchange was at $7,191.50 a tonne by 0857 GMT, versus $7,231 a tonne on Thursday, when it touched a three-month high.
The metal, used in construction and wiring, is set to rise over 10 percent in July from a month earlier.
"There's some key data out today from the United States and Chinese PMI over the weekend, which is going to help set the tone," said Daniel Smith analyst at Standard Chartered.
The U.S. GDP data is expected to show growth of 2.5 percent for the world's largest economy in the quarter ended June. The data could have an impact on the dollar, which fell against the yen. For a preview on data, see:
China's official PMI is likely to have eased to a 17-month low in July as policies to curb lending and rein in the property market weigh on manufacturing. For a preview, click on:
"The possibility that China will reaccelerate in the months ahead -- that's what everybody's gambling on I think," he said.
$7,500 KEY RESISTANCE
As the world's biggest copper consumer, demand from China has buoyed copper prices in 2009, helping them more than double.
In the physical market, traders say, Chinese merchants are keen to build copper stocks in the next few months through bargain-hunting, fed by expectations that term premiums to China for shipments next year will rise.
"We'll see consolidation around $7,200 today. If prices can hold steady above that level, we'll see further rise next week, but $7,500 will be a key resistance level," said a Shanghai-based trader.
LME copper stocks rose by 1,975 tonnes on Friday, but the ratio of cancelled warrants, or materials tagged for delivery, stood at 7.9 percent, indicating active demand.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 8 percent from a week earlier, the exchange said.
In industry news, miner Anglo American reinstated dividends but warned about delays and higher costs at its key iron ore project in Brazil after first-half profit doubled on higher prices.
LME aluminium was at $2,099 a tonne from $2,093 a tonne.
Battery material lead was at $2,030 a tonne, versus $2,050 a tonne, while tin was at $19,500 a tonne from $19,600. Nickel dropped to $20,550 from $20,675 a tonne.
Zinc was at $1,971 a tonne from Thursday's $1,990 a tonne. Metal Prices at 0857 GMT Metal Last Change Percent Move End 2009 Ytd Percent
move COMEX Cu 324.00 0.00 +0.00 334.65 -3.18 LME Alum 2094.00 1.00 +0.05 2230.00 -6.10 LME Cu 7190.00 -41.00 -0.57 7375.00 -2.51 LME Lead 2026.00 -24.00 -1.17 2432.00 -16.69 LME Nickel 20475.00 -200.00 -0.97 18525.00 10.53 LME Tin 19450.00 -150.00 -0.77 16950.00 14.75 LME Zinc 1965.00 10.00 +0.51 2560.00 -23.24 SHFE Alu 15345.00 -40.00 -0.26 17160.00 -10.58 SHFE Cu* 56270.00 50.00 +0.09 59900.00 -6.06 SHFE Zin 16165.00 -70.00 -0.43 21195.00 -23.73 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Rujun Shen in Shanghai, Editing by Alison Birrane)
