Copper gained on Wednesday, rising above $7,000 a tonne briefly, as investors bargain hunted following hefty falls, but further gains were capped by uncertainty about the outlook for global economic growth.
Three-month copper on the London Metal Exchange (LME) traded at $6,970 a tonne in official rings, up 1.5 percent from a close of $6,870 a tonne on Tuesday.
It hit a session high of $7,053, its highest since late last week, but was trading not far from 18-month lows of $6,762.25 a tonne hit on Tuesday.
The metal used in power and construction fell 5.6 percent last week, and is down 0.2 percent so far this week.
“The bounce today is a reaction to the fact that markets got oversold from the last few days. Sentiment got a bit too bearish due to weak data from China and Europe,” said Robin Bhar, analyst at Societe Generale.
“These lower prices are attracting good physical buying. There seems to be good physical demand at these levels and that is allowing a floor to be established at the 7,000 level.”
While a drop in momentum in major North American, European and Asian economies capped prices, expectations that this would lead to more quantitative easing measures from global central banks curbed selling pressure on riskier assets, such as metals.
German business sentiment fell in April for the second consecutive month, missing even the lowest estimate in a Reuters poll but the data helped reinforce expectations that the European Central Bank might cuts rates at a meeting next week.
“Weak economic data is not positive for demand but at the same time you could get central bank support and that puts a floor on price falls for commodities,” Bhar said.
Copper is eyeing its 2011 low of $6,635 a tonne, opening the door to price levels last seen in July 2010, broker Sucden said in a note.
“That being said, the CTAS (commodity trading advisors) are very short now and the surprise could be to the upside, especially if Chinese central banks decide to weigh on the stimulus games like other central banks,” it said.
Aluminium, traded at $1,900 a tonne from Tuesday’s close of $1,895.50 a tonne.
Norsk Hydro, one of the world’s biggest aluminium makers, beat first-quarter earnings forecasts due to higher prices, sales and cost cutting and predicted demand for the metal would return to levels that match supply this year.
Battery material lead, untraded in rings, was bid at $2,031 from $2,015, while soldering metal tin traded at $20,850 from $20,560 a tonne.
Stainless-steel ingredient nickel was at $15,240 from $15,130 and zinc was at $1,898 from $1,879.
The global nickel market will record a surplus of 90,000 tonnes in 2013, down slightly from 110,000 tonne surplus in 2012, the International Nickel Study Group (INSG) said on Wednesday.
Metal Prices at 1205 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07