London - Copper was almost flat on Friday, hovering near two-month lows, and heading for its biggest weekly loss in eight months, on concerns about the global economy, especially in Europe.
Three-month copper on the London Metal Exchange was $7,883 per tonne at 12:58 SA time, from $7,860 at the close on Thursday, when it hit its lowest since December 24 at $7,813.50 a tonne.
Copper prices on Thursday suffered their biggest single-day slide for 2013, losing year-to-date gains of nearly 5 percent in early February to fall into the red.
Prices are set for a drop of more than 3 percent on the week, the steepest fall since early June.
A weaker dollar, which would normally be positive for metals because it makes it cheaper for holders of other currencies, did not help.
“The dollar hasn't had much influence of late on the base metals prices, so we can ignore the dollar the moments. There's still a relatively muted mood in the base metals market,” Commerzbank analyst Daniel Briesemann said.
“We saw an initial price recovery when trading started this morning, but it seems there is risk-off sentiment today.”
But he added that overall, fundamentals are intact and does not see “see this nose dive in prices to be sustaining”.
“We expect significantly higher prices for almost all the commodities for this year,” he said.
European shares and the euro bounced off their previous session's steep falls early on Friday despite unease over European economic forecasts, ECB crisis loan repayment data and Italian elections at the weekend.
US Federal Reserve officials are likely to press on with their bond-buying stimulus program even though some harbour growing concerns the purchases could fuel an asset bubble or inflation if pushed too far.
Still, a raft of US economic data on Thursday from claims for jobless aid to factory activity and consumer prices pointed to a still tepid recovery and supported the argument for the Federal Reserve to maintain the stimulus.
US President Barack Obama spoke to Republican congressional leaders on Thursday in the first sign of movement to head off across-the-board government spending cuts that could take effect in a week.
In Asia, traders were interested in buying copper intraday although with much of China's industry yet to ramp up from the Lunar New Year holiday, any rebound next week could prove fragile, they said.
“I would be a buyer at these levels,” said one.
Trade volume on Friday was a solid 11,000 lots by around 13:00 SA time after more than 33,000 lots changed hands in the previous session, the third highest
turnover in the past year for three-month copper.
“While the complex looks well wounded and many are expecting further weakness, the right kind of buying has begun to emerge and we would think the complex won't fall much further,” RBC Capital said a note.
“Trying to catch the proverbial falling knife is always a challenge and we are just starting to see the bulls emerge, so we would expect volatility to remain elevated for some time.”
Tin was at $23,345 per tonne from $23,125 at the close on Thursday, while zinc was at $2,110 from $2,112.
Lead was at $2,329 from $2,326, aluminium was at $2,067 from $2,076 and nickel was at $16,766 from $16,630. - Reuters