London copper bounced up on Friday following a tumble in the previous session, as a weaker US dollar lent support, although concerns over weak summer demand weighed on sentiment. The dollar fell to its weakest in almost five months against a basket of major currencies as concerns about growing US government debt prompted investors to sell dollar assets from stocks to bonds.
"The weaker dollar has put restraints on bears, limiting falls in metals. But prices are unlikely to rally much either, due to sluggish demand," said Zhou Jie, an analyst at Shanghai CIFCO Futures, adding that copper prices were likely to trade in a narrow range in the near term.
On the London Metal Exchange, copper for three-month delivery rose 1 percent, or $46, to $4,515 a tonne by 0331 GMT, reversing gear from a nearly 4 percent tumble overnight. Zhou said copper inventories at the Shanghai Futures Exchange were likely to fall about 4,000 tonnes this week, after the arbitrage between Shanghai and London closed.
But others said stockpiles of the industrial metal could rise a few thousand tonnes because of large volumes of copper arriving at ports. The benchmark third-month Shanghai copper futures contract edged down 0.2 percent to 35,970 yuan a tonne by midday, more-or-less unchanged on the week.