MARKETS-METALS (UPDATE 3)
* Euro remains vulnerable near 4 year low vs dollar
* Coming up: U.S. leading indicators for April, due 1400 GMT
By Maytaal Angel
(Recasts, adds details/quotes, changes dateline from Manila)
LONDON, May 20 (Reuters) - Copper pared gains on Thursday but remained vulnerable overall due to ongoing worries over Europe's debt crisis and how it will affect economic growth.
Benchmark copper for three-months delivery on the London Metal Exchange traded at $6,530 a tonne in official midday rings from a close of $6,500 on Thursday. It had hit a session peak of $6,719.75, bouncing away from hefty losses in recent sessions.
On Monday the metal hit a three month low of $6,429. It has fallen about 18 percent since peaking at $8,043.75 in April.
An unexpected rise in weekly U.S. jobless claims briefly depressed copper prices.
"We've seen a bit of respite but metals are still vulnerable," said Credit Agricole Corporate & Investment Bank analyst Robin Bhar.
"We've got this crucial vote in Germany on Friday to sanction this euro zone IMF loan and given what Germany's done over the last 24 hours, there's still a lot of potential banana skins."
Copper lost nearly 2 percent on Wednesday as Germany, in a bid to curb financial speculation, banned risky bets in bond, stock and credit markets, fanning concerns about liquidity and growth prospects in Europe.
Global stocks, seen by some as a proxy for economic growth, fell on concerns about the risk of a wider correction and fears European countries will follow Germany and ban short selling in some instruments.
The euro, meanwhile, slumped one percent versus the dollar, nearing a
4 year low, amid ongoing fears over policy disarray in the euro zone.
A weak euro makes metals costlier for European investors.
"Any rebound we're seeing at the moment I would be treating with caution," said David Moore, commodity strategist at Commonwealth Bank of Australia.
"The market is so volatile and the issues that have been driving the market lower in recent days remain present. Sentiment is still very bearish at the moment."
OVERLOOK
Volatility has led investors to overlook recent positive economic data, particularly out of the United States, to focus on euro zone debt and the possibility of further tightening in China, the world's top metals consumer.
But technical charts suggest copper could push up to $6,813 per tonne, said Reuters market analyst Wang Tao, adding there is a chance copper could rally further by testing $7,100.
Aluminium, used in transport and packaging was last bid at $1,974 a tonne versus $2,001. It earlier hit $1,960, its lowest since late November.
The latest daily LME data showed aluminium stocks jumped up by 39,075 tonnes to total 4.58 million tonnes, bucking a trend of falls in all other base metals save for lead, which had unchanged stock levels.
But according to Bhar, the increase in aluminium stocks was not connected to fundamental factors like falling demand.
"It's because there's a squeeze on shorts, so they're electing to deliver physical metal against their short positions. Markets should ignore these big stock increases, physical demand is good because premiums are high," said Bhar.
Among other industrial metals, zinc traded at $1,847 in rings from $1,860, battery material lead was last bid at $1,745 from $1,755, tin traded at $17,145 from $17,450, and nickel was last bid at $21,100 from $21,300.
Metal Prices at 1212 GMT Metal Last Change Percent Move End 2009 Ytd Percent
move #VALUE! LME Alum 1975.00 -26.00 -1.30 2230.00 -11.43 LME Cu 6525.00 -175.00 -2.61 7375.00 -11.53 LME Lead 1750.00 -5.00 -0.28 2432.00 -28.04 LME Nickel 21025.00 -275.00 -1.29 18525.00 13.50 LME Tin 17150.00 -300.00 -1.72 16950.00 1.18 LME Zinc 1849.00 -11.00 -0.59 2560.00 -27.77 SHFE Alu 15195.00 35.00 +0.23 17160.00 -11.45 SHFE Cu* 53980.00 850.00 +1.60 59900.00 -9.88 SHFE Zin 15555.00 215.00 +1.40 21195.00 -26.61 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Reporting by Maytaal Angel. Editing by Keiron Henderson)
