METALS-Copper up, gains fragile as euro zone fears persist

* Euro rallies from recent 4-year lows vs dollar

* Chinese refined copper imports down 8.1 percent in April

* Coming up: U.S. durable goods orders Monday

(Changes headline, updates with New York closing copper
price, adds New York dateline/byline and analyst comments)

By Chris Kelly and Rebekah Curtis

NEW YORK/LONDON, May 21 (BestGrowthStock) – Copper rallied on
Friday, extending a bounce from the previous session’s near
4-month low with the help of a retreating dollar, but further
gains looked fragile as European debt fears lingered.

Copper for July delivery (HGN0: ) on the New York Mercantile
Exchange’s COMEX division jumped 11.65 cents, or nearly 4
percent, to finish at $3.0610 per lb, near the upper end of its
$2.9415 to $3.1145 session range.

On the London Metal Exchange, copper for three-months
delivery (CMCU3: ) ended at $6,845 a tonne from a close of $6,610
on Thursday, when prices in both markets sank to their lowest
levels since early February — $2.9005 in New York and $6,415
in London.

“Similar to what we had in February, the market on a
short-term basis is technically oversold and due for a
correction,” said John Gross, publisher of the Copper Journal.

“Whether it’s a short-term correction, or turns into
something more longer-lasting is a flip of the coin.”

Copper’s gains were underpinned by healthier tones in
outside markets like equities, as worries over the sovereign
debt crisis in Europe eased for the moment. [.N]

Germany approved on Friday its contribution to a $1
trillion safety net for blighted euro zone nations, but Spanish
workers raised the prospect of fresh unrest after a union said
it would probably try to call a general strike.

Greece has faced violent street protests against austerity
measures to bring its debt crisis under control.

“The dollar is a bit weaker, that’s helping but sentiment
still seems to be negative. Everybody’s tentative, it’s just
short covering interest, there’s no fresh longs coming into the
market,” said Randy North, a trader at RBC Capital Markets.

Copper, used in power and construction, has fallen some 10
percent so far this year, paling in comparison with its rise of
140 percent last year when Chinese demand was roaring.

But China is reining in monetary policy to slow its red-hot
growth, and investors fear this could hit the demand outlook.

Stoking these concerns was data on Friday showing China’s
imports of refined copper fell 8.1 percent in April. Chinese
imports rose 52.9 percent in the previous month.

Supporting copper was a fall in stocks of the metal at LME
warehouses. Inventories last fell 1,475 tonnes to below 480,000
tonnes, continuing a decline which began in February and has
boosted investors’ confidence that demand is picking up.
For graphics showing stocks data of copper, aluminum and zinc,

“Putting the technicals and volatility aside, inventories
at the LME and in Shanghai have been falling consistently for
some time now, and the market has really been ignoring that
with this downturn,” said Gross.

“It’s something that should not be ignored, but the market
is focused more acutely on the financial uncertainty coming
from Europe.”

Aluminum (CMAL3: ), used in transport and packaging, ended at
$2,055 a tonne from $1,991.

Zinc (CMZN3: ) ended at $1,894 from $1,875 and battery
material lead (CMPB3: ) at $1,811 from $1,755. Tin (CMSN3: ) ended
at $17,600 from $17,395 and nickel (CMNI3: ) at $21,350 against
Metal Prices at 1955 GMT
Metal Last Change Pct Move End 2009 Ytd Pct

COMEX Cu 305.15 11.60 +3.95 334.65 -8.82
LME Alum 2050.00 59.00 +2.96 2230.00 -8.07
LME Cu 6810.00 200.00 +3.03 7375.00 -7.66
LME Lead 1790.00 35.00 +1.99 2432.00 -26.40
LME Nickel 21340.00 140.00 +0.66 18525.00 15.20
LME Tin 17550.00 155.00 +0.89 16950.00 3.54
LME Zinc 1890.00 15.00 +0.80 2560.00 -26.17
SHFE Alu 15100.00 -95.00 -0.63 17160.00 -12.00
SHFE Cu* 53670.00 -310.00 -0.57 59900.00 -10.40
SHFE Zin 15500.00 -55.00 -0.35 21195.00 -26.87
** 1st contract month for COMEX copper * 3rd contract month for
SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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(Additional reporting by Maytaal Angel in London; editing by
Keiron Henderson, Sue Thomas, and Rene Pastor)

METALS-Copper up, gains fragile as euro zone fears persist