Copper bounces

Copper bounced nearly one percent on Friday, snapping a two-day slide that dragged prices to their lowest level in a month, as the dollar weakened and on worries about more monetary tightening in top-consumer China abated.
Copper prices - down as much as 5 percent from all-time record peaks at $9,781 per tonne in London this week and $4.4980 per lb in New York earlier this month - found their footing on Friday, as investors reassessed global demand prospects for the industrial metal. "The market is kind of readjusting itself after selling off on the concerns about tightening by the Bank of China," said Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey. London Metals Exchange (LME) copper for three-month delivery rose $86, or 0.92 percent, to end at $9,441 a tonne.
COMEX March copper firmed 3.70 cents to settle at $4.3090 per lb. Demand concerns flared up on Thursday as investors equated robust fourth-quarter growth and rising inflation in the metal-consuming giant as a bearish development, likely to trigger a new round of monetary tightening. "People got a bit carried away yesterday apart from the fact inflation is still above what we'd like - the recent data showed the Chinese story is looking very good," said Citi analyst David Thurtell. China is the world's largest copper consumer, representing 40 percent of global metals demand.
"With the tightening to date you could expect Chinese growth will slow a little bit further in the coming months, perhaps to 9.5 (percent), but combined with data in the US that continues to pick up and strong numbers out of Germany, the outlook (for metals) is pretty good," he added. Copper also benefited from a weaker US dollar, which fell to a two-month low against the euro amid improving confidence in the euro zone. A weaker US currency makes dollar-priced commodities more affordable for holders of other currencies.
Record prices in copper could cause demand destruction as industry switches to cheaper aluminium instead, said Standard Bank said in a research note. Aluminium stocks jumped by 64,000 tonnes to 4,550,325 tonnes, up by more than 6 percent so far this year alone. Lead stocks last fell 175 tonnes to 264,175 tonnes, after touching their highest level since May 1995 on Wednesday.