* Aluminium supported near cost curve; technically neutral
(Recasts, updates prices, adds comment/detail))
By Humeyra Pamuk and Michael Taylor
LONDON, July 19 (Reuters) - Copper bounced from a two-week low on Monday, helped by a hefty stock drawdown and stronger euro, but gains were limited due to uncertainty over economic growth and renewed concerns about euro zone debt problems.
At 1439 GMT, copper for three months delivery on the London Metal Exchange traded at $6,515 a tonne versus $6,485 a tonne on Friday. The metal, used extensively in construction and in wiring, dropped to a two-week low of $6,470 a tonne earlier.
"At the moment (economic) fears are prevailing," said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. "These fears are a little bit overdone.
"There is an uneasy feeling (that while) we don't believe in a double dip, you cannot guarantee that it doesn't happen as economies don't seem to be creating jobs." The euro hovered near a two-month high against the dollar on Monday, rebounding from lows hit after a downgrade of Ireland's sovereign ratings, and as investors awaited results of European banks' stress tests.
A stronger euro versus the dollar makes dollar-priced industrial metals cheaper for holders of the European currency.
Data from the United States, the world's largest economy, showed that the homebuilder sentiment index fell in July to the lowest level in more than a year. European shares turned negative after the release of the data.
In Hungary, assets plunged on Monday after the suspension of IMF/EU funding talks over the weekend.
"People believe things will get better but then this black cloud over Europe keeps looming up every time," an LME trader said. "There isn't much to trade on so the big players like CTAs are staying on the sidelines. I don't see copper breaking its range of $6,300-6,800 a tonne any time soon."
SUPPORTIVE
Another hefty stock drawdown on Monday brought total copper stocks to 422,850 tonnes, their lowest since November 2009, while a rise in cancelled warrants -- material earmarked for delivery -- of 2,250 tonnes, brought the total to 31,275 tonnes, equivalent to 7.4 percent of the total stocks.
Traders also said Chinese bargain hunters had lifted copper.
"We understand out of Asia this morning that traders are taking advantage of the SHFE/LME arbitrage with steady buying of LME copper," analyst Daniel Brebner at Deutsche Bank said in a note to clients.
Later this week, Federal Reserve Chairman Ben Bernanke's testimony to Congress will be in focus. He is expected to suggest economic growth will continue in the world's largest economy, albeit sluggish, with unemployment dropping only slowly.
On Friday, euro zone banks will releases the results of stress tests on capital adequacy.
Aluminium traded at $1,968.75 a tonne from Friday's $1,978 a tonne. Prices have fallen about 11 percent this year. Steel-making ingredient nickel was at $18,785 a tonne from $18,950 while battery material lead traded at $1,762 from $1,770.
Zinc traded at $1,800.50 a tonne and tin was at $17,825 from $17,750.
Metal Prices at 1441 GMT Metal Last Change Percent Move End 2009 Ytd Percent
move COMEX Cu 293.55 0.95 +0.32 334.65 -12.28 LME Alum 1965.00 -53.00 -2.63 2230.00 -11.88 LME Cu 6510.00 25.00 +0.39 7375.00 -11.73 LME Lead 0.00 -1770.00 -100.00 2432.00 -100.00 LME Nickel 18735.00 -215.00 -1.13 18525.00 1.13 LME Tin 0.00 -17750.00 -100.00 16950.00 -100.00 LME Zinc 1795.00 -2.00 -0.11 2560.00 -29.88 SHFE Alu 14910.00 -100.00 -0.67 17160.00 -13.11 SHFE Cu* 52320.00 -800.00 -1.51 59900.00 -12.65 SHFE Zin 15160.00 -70.00 -0.46 21195.00 -28.47 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
