Copper slightly up

Copper steadied on Monday, with the euro under pressure on renewed worries about Spain's debt troubles and contagion to other euro zone countries, but further falls were limited by signs of some spot buying from top consumer China.
Benchmark copper on the London Metal Exchange ended at $7,336 a tonne, from Friday's close of $7,310 a tonne. Aluminium dropped to a two-year low while tin fell to its lowest since September last year. Lead and zinc dropped to their weakest levels since late October.
Initial optimism following an agreement by the leaders of Germany, France, Italy and Spain on a 130 billion euro ($156 billion) package faded as investors remained pessimistic that this week's European Union summit will yield concrete measures to tackle the region's debt crisis.
The June 28-29 summit of European leaders is likely to include discussions about specific steps towards a cross-border banking union, closer fiscal integration and the possibility of a debt redemption fund.
"Markets are holding their fire at the moment to see what the Europeans come up with at this week's leadership conference. If they don't see any movement on key proposals, they very well could drive the markets lower again," INTL FCStone analyst Ed Meir said. The focus also remained on Spain, which formally requested euro zone rescue loans on Monday to recapitalise banks that are laden with bad debts.
Highlighting investors' fragile sentiment, the euro fell to its lowest in nearly two weeks against the dollar. A strong dollar makes commodities priced in the US unit more expensive for holders of other currencies. Limited copper restocking by Chinese investors, designed to exploit a favourable arbitrage between London and Shanghai, supported prices, but LME copper's fall to a six-month low on Friday showed markets were still worried the problems faced by Europe, the United States and China might crimp demand for metals.
Copper prices dropped to a six month low at $7,219.50 on Friday, and were trading 3.8 percent lower in the year-to-date as investors worry about the outlook for industrial metals demand in light of the slowdown in the global economy. "There has been some consumer buying for copper, but it was only some spot buying and the size moderate. You won't have the large hedges coming in at this price as people don't have enough conviction and think the market might be trending lower," Ivan Szpakowski, analyst at Credit Suisse said.
A Shanghai-based trader said a slight rise in physical copper demand was expected to put a floor below copper prices as consumers took advantage of lower prices and the favourable LME-ShFE arbitrage to restock a bit. Aluminium ended at $1,865 from Friday's close of $1,861. It earlier fell to its lowest level since early June, 2010 at $1,852 a tonne. "Following the sharp decline in energy prices and thanks to subsidised electricity prices in China, we are also unlikely to see any significant cuts in production (of aluminium) in the foreseeable future, so the aluminium price can be expected to remain under pressure," Commerzbank analysts said in a note.
Tin ended at $18,500 from $18,675, having earlier fell to its lowest since late September at $18,249. Battery material lead ended at $1,788, its lowest level since late October, from Friday's close of $1,816. Zinc, used to galvanise steel, closed at $1,805 from $1,800, having earlier dropped to $1,792 - its lowest since late October. Nickel ended at $16,420 from $16,575.