LONDON: Copper firmed on Friday, erasing early losses, as buyers were tempted back to the market by this week's hefty price fall, with a recovery in Chinese stocks and oil prices from their overnight lows helping sentiment.
"There is room for a bit of a short-lived rebound on short-covering," said William Adams, an analyst at BaseMetals.com. "There is a bit of bargain hunting around, and a bit of pent-up buying from when we had higher prices." A recovery of the wider financial markets from their lows is also helping sentiment, he said. "Some of the equities in Europe seem to be rebounding, and though equities were down in Asian overnight, China's had fallen over 3 percent but ended up in positive territory, so there might be an end-of-week short covering rally," he said.
Three-month copper on the London Metal Exchange was trading at $6,625 a tonne at 0723 GMT compared with $6,610 at the close on Thursday. Aluminium was at $2,005 a tonne from $1,991. The dollar weakened against the euro, with the single currency rising as a bout of short-covering extended after its slide to a four-year low earlier this week.
The General Administration of Customs of China released data showing China's imports of copper, aluminium, iron ore and coal via major ports in April and the first 4 months of 2010. China's imports of refined copper fell 8.1 percent on the month after a 52.9 percent rise in the previous month, due to Beijing's moves to tighten lending and reduced arrivals of contracted shipments. China's imports of iron ore from Australia reached 20 million tonnes in April, down 17 percent compared with the previous month, customs data showed on Friday.
Copper support at $6,145, resistance at $6,770, 14-day RSI at 37.5. Aluminium support at $1,950, resistance at $2,036, 14-day RSI at 35.8. LME copper is rangebound between $6,420 and $6,770 without a clear technical signal to indicate its next move. LME aluminium is expected to be mildly volatile and may have limited downside potential.
