Copper springs back

Copper rose on Thursday, bouncing from a two-week low as the dollar pared gains, but sentiment remained weak as poor US jobs data underlined concerns about the pace of growth in the world's largest economy. Benchmark copper on the London Metal Exchange touched $7,150 a tonne, its lowest since July 29. The metal used in power and construction closed at $7,260 a tonne, compared with $7,191 at the close on Wednesday.
The euro edged up versus the US currency, cheapening dollar-priced metals for European investors. The dollar also fell versus a basket of major currencies. But some analysts remained cautious about the market. "There's some nervousness again that we're heading for a period of slower growth," said David Wilson, an analyst at Societe Generale, citing weak recent US data. "There is this nervousness over China, that the US is growing slower than expected, and that growth in the US is being driven by corporate investment."
Copper touched a three-month high of $7,527 a tonne last week, a gain of about 25 percent since early June when the eurozone debt crisis was the dominant driver of moves in financial and commodity markets. National Australia Bank expects to see metals prices trending higher in the fourth quarter of this year with further signs of economic recovery in the developed world and re-stocking in Asia.
"That said, fiscal austerity, weak labour markets and further deleveraging will continue to provide headwinds to the demand recovery in the North Atlantic economies for sometime," the bank said in a note. Prices of aluminium, used in transport and packaging, touched $2,131 a tonne, their lowest since July 30. It closed at $2,163.5 a tonne from $2,142 on Wednesday. Aluminium stocks stand at around 4.4 million tonnes. That is down from the record above 4.6 million tonnes seen in January, but it is still high, accounting for more than 40 days global consumption estimated at 37 million tonnes this year.
However, about 70 percent of LME aluminium stocks are said to be tied up in financing deals, which release cash for producers and help banks earn high returns. Steel ingredients nickel and zinc saw $21,100 a tonne and $2,013.50 respectively, both the lowest since August 2. Nickel closed at $21,500 a tonne from $21,695 on Wednesday. Zinc was at $2,056 a tonne from $2,037. Battery material lead fell to a two-week low of $2,032.50 a tonne. It closed at $2,100 a tonne from $2,061 on Wednesday and tin was at $20,500 from $19,850.