* Markets await Bernanke testimony Wednesday, Thursday
* China demand "remains challenging" -Commerzbank
By Silvia Antonioli
LONDON, July 16 Copper rose on Tuesday, helped
by a weaker dollar, as investors waited for further signals on
when the U.S. Federal Reserve might begin to rein in its monthly
The dollar eased against a basket of currencies but its
losses were limited, supported by the view that the Federal
Reserve is likely to be the first among major central banks to
move away from ultra-loose monetary policy.
A weaker U.S. currency makes prices of dollar-priced goods,
such as metals, cheaper for holders of other units.
Markets are waiting for Fed Chairman Ben Bernanke to testify
to Congress this week for more information on when the U.S.
plans to scale back its huge bond-buying programme, which has
supported demand for commodities.
Benchmark copper on the London Metal Exchange ended
up 1.13 percent at $6,998 a tonne, after falling half a percent
in the previous session.
Copper prices hit a nearly 1-month high at $7,049.25 a tonne
on July 11, but have failed to gain traction above $7,000 and
are down about 12 percent this year.
"The overly pessimistic market in the past few weeks and
months is making copper vulnerable to a short-term recovery,"
said Eugen Weinberg, head of commodity research at Commerzbank.
"Much of the growth fears are already priced in. So I don't
see much potential to the downside. But any price increase is
going to be gradual. The Chinese demand situation remains very
China's economic growth slowed to 7.5 percent in the second
quarter, from 7.7 percent in the first quarter, the ninth
quarter in the last 10 that expansion has weakened.
Chinese Premier Li Keqiang said earlier the government
should not rush into changing policy as long as economic growth
stays within the official comfort zone, although it needs to be
vigilant about a sharper slowdown.
China is the world's largest buyer of copper and it makes up
about 40 percent of global consumption.
In other economic data, U.S. homebuilder confidence rose in
July to its strongest level in 7-1/2 years amid tightening
supply and solid demand, while U.S industrial production rose
slightly more than expected in June.
Underlining a softening outlook for metals demand, the Asian
Development Bank (ADB) on Tuesday lowered its growth forecasts
for developing Asia this year and next as a softer outlook for
China meant subdued economic activity elsewhere in the region.
Also, European car sales slumped to their lowest six-months
total in 20 years in the first half of 2013, with a 6.3 percent
drop in June suggesting no let up for an industry battered by
overcapacity and weak demand.
On the plus side for copper demand, a crackdown in China
aimed at curbing distorted credit growth has triggered growing
appetite for the use of commodities as collateral to raise cash,
inflating copper imports.
In other metals, three-month nickel ended up 1.96
percent to $13,770 a tonne.
The global nickel market was in surplus by 12,000 tonnes in
May, up from 8,700 in April, a monthly bulletin from the
Lisbon-based International Nickel Study Group showed on Monday.
Aluminium ended up 0.61 percent at $1,815 a tonne,
lead closed up 0.97 percent at $2,075 a tonne, zinc
finished down 0.21 percent at $1,888 a tonne, while tin
ended up 0.34 percent at $19,455 a tonne.