Copper steadied on Thursday following a 3 percent loss the prior session, helped by consumer buying and stabilising appetite for risk, but any gain was expected to be limited ahead of the long Easter weekend in US and European markets.
Three-month copper on the London Metal Exchange traded at $8,335.25 a tonne at 11:30 SA time, down by 0.2 percent from a close of $8,350 a tonne on Wednesday.
Copper this week rallied to within 1 percent of 2012 peaks above $8,700 a tonne on anticipation of fresh easing by the world's biggest economy, before minutes from a US monetary policy meeting on Tuesday quashed those expectations and led to a divestment of risk across markets.
Prices have been caught in a sideways range since late January, buttressed by consumer buying around $8,200 a tonne and capped by producer selling at $8,600, analyst David Wilson of Citi said.
“Each time copper dips we see consumer hedging and some buying from investors. But as prices get to about $8,600, you're getting some of the small producers selling. Funds have no conviction either way, so it seems to be stuck in this range for now,” he said.
Market attention will now turn to US non farm payrolls on Friday, and trade data from top copper consumer China, which will shed fresh light on consumption in a country that accounts for 40 percent of world copper demand.
Both figures are due before London reopens on Tuesday.
The US non farm payrolls report is expected to show a fourth month of solid job growth in the United States in March, according to economists polled by Reuters.
“With our house view for US employment data to come in above consensus, we could see room for potential upside in copper prices in the coming days,” ANZ said in a research note.
Elsewhere, European shares eked out modest gains on Thursday with investors looking for bargains after three weeks of losses, but sentiment remained fragile after lower demand at a Spanish auction rekindled funding concerns for weaker euro zone countries.
Worries about a weakening euro zone weighed on the single currency, helping to send the dollar index to a two-week high and weighing on metals. A stronger dollar makes commodities more expensive for holders of other currencies.
CHINA IMPORTS
Chinese trade data early on Tuesday is expected to show consistently high copper imports as metal is used as collateral to secure cheaper financing in the credit-strapped country.
China's arrivals of refined copper are expected to have risen in March after February's higher-than-expected figure as importers scheduled more term shipments under 2012 contracts on expectations of peak domestic demand, traders said last month.
“You're probably going to find the import number is reasonable, given the Chinese are buying for financing reasons. It's just got nothing to do with consumption,” Citi's Wilson added.
Import figures, which used to be seen as a barometer for demand, have become muddied over the past year because up to 80 percent of imports are used for financing deals.
Given still paltry domestic demand, traders are also interested in the volume of exports, which may have jumped in March as local smelters and traders took advantage of higher international prices to sell their plentiful stocks abroad.
Consistent with the re-export of metal from China, copper stocks in warehouses monitored by the LME rose by more than 5,000 tonnes, data showed on Thursday, with shipments registered in Singapore and Busan.
Across other metals, Tin was at $22,450 from $22,600, while zinc, used in galvanising, was at $1,974.25 from $1,982 on Wednesday's close.
Battery material lead was at $1,987.25 from $2,012.50, and aluminum was at $2,097.50 from $2,093.
Nickel was at $17,734 from $17,855. - Reuters