Copper recovers after equities steady in Asia and Europe

Copper recovered some of yesterday's losses after equities steadied overnight, restoring some much needed confidence to a shaken market. The red metal had lost almost 2 pct yesterday following a steep sell-off in global equities caused by the expanding US sub-prime crisis. 'It's picked up in-line with what's happened in Asia overnight, and European equity markets this morning,' said BaseMetals.com analyst Martin Hayes. At 10.40 am, LME copper for three-month delivery was trading at 7,905 usd, down from 7,865 usd at the close yesterday. A decline in copper inventories at LME-certified warehouses was also lending support, with stockpiles down 50 tonnes to 103,425 tonnes. Labour news from key producers continues to be mixed, with the end of a strike by contract workers at Codelco in Chile largely off-set by news of a walk-out at Grupo Mexico's Cananea mine. Southern Copper workers in Mexico are also striking at three of their mines, supporting prices. Analysts have warned that strike action could continue to threaten supply throughout the summer and beyond. 'While Codelco has concluded its discussions with its contract workers and the union that supports the workers, the union is now focusing on other producers that they believe discriminate between employees and contract workers,' said JP Morgan analyst Michael Jansen. 'Hence the disputes we saw affecting Codelco this past 4-6 weeks might be indicative of more action to come.' Analysts are predicting that base metal prices will continue to be volatile in the short-term, as they look to other financial markets for direction during the historically quiet summer months. 'When we are in the summer slowdown, the LME and other commodity markets will be far more susceptible to outside influence from funds and the moves in other financial markets,' said Hayes at BaseMetals.com. 'When trade is light it's easier for external factors to move the market.' In other metals, lead rose over 3 pct to 3,255 usd versus 3,145 usd at the close on Tuesday. Zinc rose to 3,568 usd against 3,521 usd and tin also climbed to 16,100 usd usd per tonne, against 15,750 usd. Nickel, which was hit hard yesterday with added pressure coming from declining use by stainless steel manufacturers, recovered slightly to 30,900 usd, against 30,775 usd. Aluminium continued to trade in a tight range, almost flat at 2,740 usd versus 2,739 usd.