RTRS:Copper bounces from two-week lows; growth worries weigh
By Melanie Burton
SINGAPORE (Reuters) - London copper bounced on Friday, coming off two-week lows hit in the previous session, but prices were on track for a weekly loss as global growth concerns and tepid demand from top consumer China kept a lid on gains.
Three-month copper on the London Metal Exchange rose 0.77 percent to $8,354 a tonne by 0242 GMT. It touched a two-week low of $8,262 a tonne and closed down 2 percent in the previous session, but is still up nearly 10 percent this year.
The most-traded June copper contract on the Shanghai Futures Exchange was almost unchanged at 59,700 yuan a tonne, down 0.1 percent from Thursday.
Worries about faltering global growth hit equities and commodities on Thursday after weak data on manufacturing activity in China and the euro zone.
China is the world's top consumer of copper, accounting for 40 percent of refined demand last year, but Chinese copper consumption has been sluggish so far this year due in part to softness in export markets like Europe.
"At the moment, more and more people realise there is weak domestic demand in China, but market insiders are still not sure when it will recover, or the scope," said Grace Qu, analyst at CRU in Beijing.
"In the short term, copper prices will face downward pressure, but I don't expect the price to decline sharply. I still think $8,000 is a support level," she added.
Traders said that there was scope for copper prices to fall further, as the market was in sell-the-rallies mode with China buyers reluctant to come to the table even at current levels.
An end-week close below the 200 moving day average (DMA), a key level watched by funds, could also trigger further chart-based liquidation, said one. The 200DMA was pegged at $8,340 a tonne on Friday.
In other metals, there were signs Chinese demand for battery material lead was picking up in response to falling prices.
The differential between LME and Shfe lead prices this week turned positive for Chinese imports, while the ShFE forward curve has tightened since mid-month, flagging an uptick in spot demand.
"With Chinese physical buying interest picking up noticeably in the past couple of days, and with lead still having a better fundamental outlook than zinc, and many of its other peers, the risk to prices seems more skewed to the upside," Standard Bank said in a research note.
