By Bloomberg News June 11 (Bloomberg) -- Copper headed for its largest weekly advance in two months on reduced concern that Europe’s debt crisis and a slowdown in China, the world’s biggest consumer, would hurt demand. Zinc increased. Three-month delivery copper fell 0.2 percent to $6,399.75 a metric ton on the London Metal Exchange, after gaining as much as 0.2 percent, trimming its gain this week to 1.9 percent, the most since the start of April. Zinc increased 0.9 percent to $1,735 a ton after climbing as much as 1.5 percent. The euro traded near its strongest level since June 4 and the Dollar Index is poised for the first weekly decline in three, as speculation Europe’s debt crisis is unlikely to derail global growth fueled investor appetite for riskier assets. China’s industrial output rose 16.5 percent in May from a year earlier, a government report showed today, less than economists’ median forecast of 17 percent. Production grew 17.8 percent in April. “This week’s rebound, technical on the dollar in my view, is pretty attention-grabbing for investors,” Huang Hongjun, an analyst at Jinrui Futures Co., said from Shenzhen today. “The gain doesn’t signal a flip of the weak trend,” he added. Copper entered a bear market last week, plunging more than 20 percent from an April peak on concern the global economic recovery may be at risk, imperiling demand. The metal slumped as low as $6,037.50 on June 7, the lowest price in eight months. Among other economic data released today, China’s inflation accelerated in May to 3.1 percent, the quickest pace in 19 months. Banks extended 639.4 billion yuan of new local-currency loans last month, exceeding a Bloomberg News survey forecast. Money Available “The CPI number is within expectations,” Che Weiyuan, a trader at Dayue Futures Co. said from Shaoxing, Zhejiang province today. “Money is still readily available in China.” Copper for September delivery in Shanghai jumped as much as 2 percent to 51,640 yuan ($7,561) a ton and last traded at 51,330 yuan. Shanghai zinc rose as much as 1.7 percent to 14,405 yuan and aluminum as much as 1.1 percent to 14,675 yuan. “Zinc has the most upside potential in this rebound, possibly reaching 16,000 yuan, as it’s been down the most among its peers,” Che said. China’s production of copper, aluminum and zinc all increased in May from April, according to data from the statistics bureau today. Aluminum in London was 0.4 percent down at $1,942 a ton, lead added 0.2 percent to $1,686.50 a ton, nickel rose 1 percent to $19,130 a ton and tin slid 0.9 percent to $16,500 a ton. --Li Xiaowei. Editor: Matthew Oakley. To contact the Bloomberg News staff on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net

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