Copper steadies

Copper steadied on Wednesday from four percent losses in the prior session, holding near $8,000 a tonne as twin concerns of slowing US and Chinese growth curbed demand expectations for the metal, but consumer buying cushioned losses. Three month copper on the London Metal Exchange ended at $8,040 a tonne from a close of $8,036 a tonne on Tuesday.
Copper earlier hit a trough of $8,018.00 a tonne, its lowest since January 16, after it registered its biggest one-day fall since early December the previous session when many markets returned from a long Easter break. "The worry is that China's slowdown might be slightly sharper than people expected," said analyst David Wilson of Citi. China is the world's top consumer of base metals. Trade data this week knocked confidence the world's top two economy has the muscle to power the global economy out of recession. Markets are now looking to retail sales, industrial output and first quarter gross domestic product data due on Friday.
"Concern about overall Chinese demand is growing, and the trade numbers out yesterday did little to assuage these fears," said Edward Meir, analyst at INTL FCStone. "Although copper imports were decent, the rise in local Chinese copper stockpiles coupled with softer premiums, suggest that a good portion of this metal is being channelled into stockpiling arrangements as opposed to getting consumed."
Sentiment stabilised in European sharemarkets on Wednesday relieving some of the selling pressure on metals, however investors remain nervous about the euro zone's debt problems after a sell off in Spanish bonds and signs of dwindling global growth. "For now it looks as though demand side fundamentals are driving prices and we would expect that to lead to further weakness in the days ahead," FastMarkets said in a note.
There were no reports of damage so far from an 8.7 magnitude Indonesian earthquake that triggered a tsunami warning. Freeport McMoRan Copper & Gold operates the Grasberg mine on Indonesia's Papua island which holds the world's largest gold reserves and is the second largest copper mine.
Aluminium producer Alcoa Inc surprised Wall Street with a first-quarter profit after a loss in the fourth quarter of 2011 as global markets improved, especially in the aerospace and automobile sectors. It said it sees a global supply deficit this year, while it raised its forecast for aerospace demand growth and saying continues to look for high-cost smelting and refining capacity for potential capacity cuts.
"We cannot agree with Alcoa's assessment that the global aluminium market will close the year with a supply-side deficit of up to 435,000 tonnes," Commerzbank said in a research note. LME aluminium ended at $2,099, from $2,065, steadying from three-month lows the last session.
LME zinc stocks rose above 900,000 tonnes for the first time since 1995, latest LME data showed, with tepid demand from the galvanised steel sector failing to erode stocks that have piled up over years of global surpluses. LME zinc closed at $1,995 from $1,990 on Tuesday. LME copper stocks, which have been rising since mid March, fell on a net basis, the latest LME data showed. Nickel was untraded at the close, but bid at $18,100 from $18,175, tin ended at $22,425 from $22,750 while battery material lead was at $2,053 from $2,015.75.