Copper was steady on Thursday after hitting a three-week low the previous session as weak trade data from China, and worries about difficulties Greece and Spain face in reducing their sovereign debt kept the red metal under pressure.
Benchmark copper on the London Metal Exchange was at $ 8,033 a tonne by 11:33 SA time, 0.3 percent down from a last bid of $8,053
on Wednesday.
China's copper imports fell 18.8 percent to an 8-month low in April, preliminary official data showed.
This fall was largely expected as a plentiful supply of the metal in the world's top copper consumer curbed its purchases on the international market.
Weak import and export growth in China were also weighing on sentiment raising some doubts about the country's growth prospects.
“Copper is taking a breather after the heavy shake-up across markets we have seen in the past few days but there is still a lot of uncertainty out there: there are concerns about China, about the outlook for Spain, Greece and the euro zone,” said Credit Suisse analyst Stefan Graber.
Spain on Wednesday took over Bankia, one of the country's biggest banks, aiming to dispel concerns over the government's ability to clean up the financial sector.
Greek Socialist leader Evangelos Venizelos will make a last-ditch attempt to form a government on Thursday and avoid a new election after voters rejected a bailout deal and pushed Greece into a political crisis.
Unlike the macro outlook though, copper fundamentals pointed to a slightly stronger picture.
“The physical market doesn't look as bad as the price would suggest. We hear of some buying activity here and there and this is in line with the latest manufacturing data from China, which points to a pick up in manufacturing activity.”
BUY BELOW 8,000
Copper inventories in LME-monitored warehouses fell to 219,850 tonnes, hitting a fresh 3 1/2 year low.
Stocks of copper in warehouses monitored by the Shanghai Futures Exchange (SHFE) have also declined in the last few weeks after a very steep rise in the first quarter this year.
“An inventory reduction has been observed for the past four weeks on the SHFE. In the short term, the copper price could remain under pressure, given that China's import demand has had a major bearing on the price for long periods in the past,” Commerzbank said in a research note.
“Copper briefly dipped below the $8,000 a tonne mark yesterday to hit its lowest price for three weeks, though it recovered again overnight. It would appear that there is increased buying interest among market players at prices below $8,000 a tonne.”
In other metals tin was at $20,500 from $20,605 at the close on Wednesday while zinc, used to galvanise steel was at $1,937.75 from $1,943. Battery material lead was at $2,067 from $2,075 and aluminium was at $2,039.25 from $2,049.
Stainless steel ingredient nickel was at $17,100 from $17,195. - Reuters