* Copper hits biggest weekly loss since mid Dec 2011
* Strong dollar, risk-off sentiment weighs
* Traders bargain-hunting, but any gains seen fragile
By Susan Thomas and Harpreet Bhal
LONDON, Feb 22 Copper slipped on Friday to its lowest level in
two months and showed its biggest weekly loss in 14 months on concerns about the
global economy and the demand for industrial metals.
Three-month copper on the London Metal Exchange closed at $7,805 a
tonne, down from $7,860 at the close on Thursday. It earlier fell to its lowest
level since Dec. 21, at $7,796.
The metal used in power and construction had fallen 4.8 percent so far this
week, its biggest weekly fall since mid-December 2011, after suffering its
biggest single-day slide of 2013 on Thursday.
Putting further pressure on metals prices was a rise in the dollar against
the euro. A stronger dollar makes commodities priced in the U.S. currency more
expensive for holders of other currencies.
"We saw an initial price recovery when trading started this morning, but it
seems there is risk-off sentiment today," Commerzbank analyst Daniel Briesemann
said, adding that, overall, fundamentals are intact and that he did not expect
the price dive to be sustained.
"We expect significantly higher prices for almost all the commodities for
this year," he said.
U.S. Federal Reserve officials are likely to press on with their bond-buying
stimulus programme, even though some harbour concerns that the purchases could
fuel an asset bubble or inflation if pushed too far.
However, a succession of U.S. 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
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, but with much of
China's industry yet to ramp up from the Lunar New Year holiday any rebound in
metals next week could prove fragile, they said.
"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 in 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."
Benchmark lead ended at $2,304 a tonne, from $2,326 at the close on
Thursday, while benchmark tin closed at $23,105, from $23,125.
Zinc ended at $2,088 from $2,112, and nickel closed at
$16,940 from $16,630. Aluminium was untraded at the close, bid at $2,048
Metal Prices at 1717 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2012 Ytd Pct
COMEX Cu 353.35 -1.95 -0.55 365.25 -3.26
LME Alum 2049.25 -53.75 -2.56 2073.00 -1.15
LME Cu 7810.25 -239.75 -2.98 7931.00 -1.52
LME Lead 2307.00 -19.00 -0.82 2330.00 -0.99
LME Nickel 16915.00 285.00 +1.71 17060.00 -0.85
LME Tin 23066.00 -59.00 -0.26 23400.00 -1.43
LME Zinc 2088.00 -24.00 -1.14 2080.00 0.38
SHFE Alu 14960.00 25.00 +0.17 15435.00 -3.08
SHFE Cu* 57620.00 10.00 +0.02 57690.00 -0.12
SHFE Zin 15700.00 30.00 +0.19 15625.00 0.48