Copper rose on Tuesday as industrial users pushed back into the market attracted by the lowest levels in two weeks, but high oil prices due to the Libya crisis kept up concerns over economic growth and demand. Three-month copper on the London Metal Exchange closed at $9,530 a tonne from Monday $9,499. It earlier hit a session trough of $9,346.25 a tonne, its lowest since February 24.
-- Tin, zinc and nickel hit lowest since end-January "We're now beginning to attract consumer interest," Alex Heath of RBC Capital said of copper. "The market's still in an uptrend," he added. The metal used in power and construction fell 4 percent on Monday, its sharpest daily drop since mid-November.
Copper rallied nearly 30 percent from mid-November to a record high at $10,190 on February 15, but the strength of the rally dampened buying interest for the industrial metal. North Sea Brent crude dropped below $113 a barrel but was within reach of 2-1/2 year highs, with the potential for unrest to spread further in North Africa and the Middle East keeping tensions high in financial and commodity markets.
"What's dominating things by far is the events in the Middle East, oil prices, concerns about global economic growth," Gayle Berry, an analyst at Barclays Capital, said. But Berry added the losses in copper prices could lure Chinese buyers back to the market after a recent dearth of buying by the world's top base metals consumer. Elsewhere, tin, zinc and nickel on Tuesday hit their lowest since end-January.
Copper demand is expected to grow in China as its economy booms, but the growth rate may slow due to government measures to curb inflation. Copper stocks fell 650 tonnes to 426,500 tonnes, coming off Monday's level of 427,150 tonnes, which was the highest since July 2010. Inventories of copper have climbed by about 20 percent since December, raising some concerns about waning demand.
Zinc inventories also continued to increase, up by 9,025 tonnes to 734,550 tonnes, the highest level since September 2004. Zinc was at $2,596 a tonne from $2,370 at Monday's close, having earlier dropped to $2,328, its lowest since the end of January. Tin also fell to its lowest since the end of January at $29,600. It later closed at $30,600 a tonne from a last bid of $30,700 on Monday. Nickel was at $26,900 from $27,475 a tonne, having earlier fallen to $26,215 a tonne, its lowest since end of January.
Battery material lead was at $2,590 a tonne from $2,580 and aluminium closed at $2,596 from $2,558 a tonne. "The emergence of bargain-hunting interest may offer interim support," Basemetals.com said in a note.