London - Copper prices slipped on Thursday as concerns about the outlook for demand and global oversupply weighed on sentiment although some optimism about China's economic revival helped cushion falls.
Three-month copper on the London Metal Exchange traded at $7,550.50 a tonne at 11:50 SA time, down 0.3 percent from Wednesday's close at $7,575.
Prices hit a two-week high of $7,645.25 this week, rebounding from 8-month lows at the start of April, but traders said they are selling into rallies.
The metal used in power and construction is down by almost 5 percent this year.
“In general we attribute the weakness to institution investors fleeing commodity markets due to the weak performance in recent months and during the last year compared to equities,” said Daniel Briesemann, analyst at Commerzbank.
“Looking ahead, investors are focused on economic data out of China including GDP numbers, which will be a major driver for base metals prices.”
Demand remains uncertain due partly to rising stockpiles and a slowdown in economic growth in China, which accounts for as much as 40 percent of global demand for refined copper.
LME copper stocks and ShFE inventories are around their highest levels in a decade, while stocks in Shanghai's bonded zone are close to record levels.
China's annual economic growth is likely to have nudged higher in the first three months of 2013 over the last quarter of 2012, with fixed asset investment and factory output growth in double digits, a Reuters poll showed.
Also greasing the wheels of industry in China, banks extended 1.06 trillion yuan ($171.2 billion) of new local currency loans in March, sharply up from the previous month, central bank data showed.
In the United States, commodities prices were hurt by uncertainty over the outlook for the Federal Reserve's stimulus programme, with the minutes of its meeting last month suggesting the central bank could be on course to end its extraordinary bond buying by year-end.
IMPORTS
Chinese imports of key commodities rebounded in March from the month before as hopes of a strengthening economy encouraged end-users to ramp up output and cautiously replenish stocks.
China's March copper arrivals rose 7.2 percent from a month earlier on hopes factories would resume output after the Lunar New Year break, but fell by a sharp 30 percent from a year ago, indicating the pick-up in demand was not as strong as expected.
The world's top consumer has also exported some of its surplus.
The latest data showed exports of refined copper jumped to 64,781 tonnes for the first two months of the year, up from 753 tonnes
from the same period a year earlier.
Aluminium fell to $1,894.75 from a last bid of $1,909.50 on Wednesday while zinc fell to $1,892.75 from $1,910.
Tin fell to $22,750 from $22,875, nickel was at $16,066 from $16,050 and lead slipped to $2,085 from $2,090. - Reuters