METALS - London copper edges off 3-month low as Russia softe

Reuters - London copper steadied on Tuesday, climbing off three-month lows touched the day before as a possible softening in Russia's stance on the Ukraine eased risk aversion that had been fuelled by signs of shrinking manufacturing growth in top metals user China.

Tepid growth in developed nations and fresh risks to emerging markets have battered sentiment towards metals as traders await orders to pick up after Lunar New Year, and signs of a deeper-rooted revival in the United States.

"Copper has been drifting downwards. We've got risk aversion in play and the USD has strengthened on the back of the Ukrainian tensions," said analyst Tim Radford with Sydney-based advisor Rivkin.

Low volumes suggest buyers are out on the sidelines, likely in part waiting for Friday's major U.S. jobs report, where a poor result could pile more pressure on metals, he said.

"Friday is the big event with U.S. non farm payrolls out. It wouldn't surprise me to see another miss on the downside given the economic weak patch recently."

Three-month copper on the London Metal Exchange edged up by 0.34 percent to $6,992 a tonne by 0707 GMT, from the previous session when it fell to a three-month low of $6,944 a tonne.

The most-traded May copper contract on the Shanghai Futures Exchange finished flat at 48,990 yuan ($8,000) a tonne, having descended to a new seven-month trough in overnight trade.

Russian President Vladimir Putin ordered troops that took part in military exercises this week to return to base, Russian news agencies quoted the Kremlin spokesman as saying on Tuesday. The exercises took place across western Russia, an area that borders Ukraine.

There was no word, however, on movement of Russian forces that have effectively occupied much of Crimea.

Meanwhile, manufacturing growth in Europe and Asia slowed last month, pressured by falling demand from abroad, while the United States bucked the trend with manufacturing expanding at its fastest pace in over three years.

U.S. auto sales in February finished even with the year-earlier period as hefty incentives to lure customers into dealerships late in the month could not overcome cold and snowy weather.

In China, a falling yuan, ample supply and tight credit conditions have curbed appetite for copper, a Singapore-based trader said.

"The copper market is very weak right now," he said.

China's central bank downplayed the yuan's recent fall on Monday, saying the world's second-largest economy is in a good shape and the currency's decline did not reflect fundamentals.

In other metals, discretionary funds have been taking profits on nickel, the best performer of the LME set this year, as traders anticipate a supply shortfall after Indonesia banned exports of ore in mid-January, another trader said.

"Discretionaries were certainly long of it, and added to that position last week...Some of those discretionaries taking profit," he said.

LME nickel prices hit their highest in six weeks at $14,750 on Tuesday, and are within reach of seven-month highs.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Three month LME tin

($1 = 6.1462 Chinese yuan)