Copper Steadies After 4-Month Low on Greece
May 16, 2012 by Gold Editor
SOURCE: [Reuters] - Copper steadied from four-month lows on Wednesday, but was still set to notch up a fourth session of losses, after French and German leaders said they don't expect Greece to leave the euro zone which reassured investors who were never-the-less concerned about a slowdown in big metals consumer China's economy.
World shares fell and the euro touched a four-month low after talks in Greece for a new government failed, forcing another round of elections.
But comments by Germany's Chancellor Angela Merkel and the new French President Francois Hollande that they both wanted Greece to remain in the euro zone helped to reassure markets and ease investors flight from risky assets.
Three-month copper on the London Metal Exchange traded at $7,728 at 1402 GMT, still down by half a percent but recovering from an earlier trough of $7,625, its lowest since Jan. 10. Copper, which had rallied by more than 12 percent by early February has shed almost all of its 2012 gains.
"One of the more concerning aspects of the global economy is China, where we have some indicators suggesting that growth is slowing more meaningfully and that and things look perhaps a little more worrying with respect to how much support that will give to metals market," analyst Dan Brebner of Deutsche Bank said.
"That said we've had a decent correction. It doesn't take much for things to turn around, but given where we are now I think it's looking a bit overdone."
Data last Friday showed China's economy weakening from its slowest quarter of growth in three years. Industrial production growth slowed sharply in April and fixed asset investment - a key growth driver - hit its lowest level in nearly a decade. China is the world's largest consumer of copper.