Copper up on euro rebound; seasonal slowdown eyed

Fri May 25, 2012 8:42am EDT
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By Melanie Burton

LONDON (Reuters) - Copper was up half a percent on Friday, boosted by a euro rebound against the dollar and bargain-hunting after it hit 4-1/2-month lows this week, but analysts said that a seasonal slowdown may mean prices could fall again before summer.

LME copper was not traded in official rings, but was quoted at $7,654 a metric ton (1.1 ton) up half a percent from a $7,610 close on Thursday. Prices hit the lowest since early January at $7,503 this week and were set to close little changed.

A euro rebound from near two-year lows helped ease pressure on the complex, ahead of a long weekend, and in the absence of fresh developments over a potential Greece departure from the euro zone, analyst Robin Bhar of Societe Generale said.

"There's the currency factor and it's a long holiday weekend in the U.S. and Germany so obviously players are covering any exposed short positions, plus there's the usual concerns that we're not going to get any clarity until the Greek elections," he said.

Worries about the fate of Greece's euro membership remain in focus after an opinion poll found the anti-bailout leftist party SYRIZA maintaining its lead ahead of the June 17 election.

"As for copper demand, European consumers are pretty well covered, and we're heading into a seasonal slowdown. So it does beg the question, will prices find it difficult staying at these levels by mid to end June it could be a struggle," he added.

Top consumer China's appetite for metals tends to be strongest March to May, while European industry and to a lesser extent that in the U.S., will start to shutter from next month for the summer holidays.

"European consumers have done all their spot buying and we're approaching summer - there won't be much to come in and support prices," a London trader said.   Continued...

A worker checks a shipment of copper inside the plant at the copper refinery of Codelco Ventanas in Ventanas city, about 164 km (101 miles) northwest of Santiago, April 16, 2012. REUTERS/Eliseo Fernandez