Market and product

NEW YORK/LONDON, May 7 (Reuters) - Copper showed some resilience in late business on Friday, recouping nearly all of its earlier losses and touching $7,000 per tonne in London, as the euro recovered against the dollar and supply concerns developed in Chile.

Copper for July delivery HGN0 on the New York Mercantile Exchange's COMEX division rose 2.75 cents to settle at $3.1445 per lb, near the upper end of its $3.0620 to $3.1790.

Scott Meyers, senior trading analyst with Pioneer Futures in New York, based the positive price reversal on strong technical momentum from oversold conditions.

"This is a reflex rally from oversold conditions," he said. "The $3.00 level continues to be a big number for this market."

Benchmark copper for three-month delivery CMCU3 on the London Metal Exchange fell as low as $6,760 a tonne, before closing at $6,940 a tonne, down $10 from Thursday's close.

The metal, used extensively in construction and wiring, hit $7,000 a tonne briefly when it rallied in tandem with the euro climbing higher.

"Copper's held up pretty well in the whole sell-off and now we see the euro coming back up and that's helping," said Andrey Kryuchenkov, analyst at VTB Capital.

A weak euro makes metals costlier for European investors. Copper's turnaround also coincided with news from Chile that production at the Collahuasi copper mine, one of the world's biggest deposits, may have been halted due to protests from subcontractors demanding better wages. [ID:nN07215986]

"I'm sure this move in copper is related to this," said Anthony Young, vice president with Dahlman Rose & Co, LLC.

But for the time being, the market's attention continued to be squarely focused on Greece, and fears its debt crisis will spill over into other countries.

"What we're seeing is general nervousness about Europe and debt levels," said analyst David Wilson at Societe Generale. "This is prompting a flight out of generally what investors think as riskier assets," he said.

Euro zone leaders were scheduled to meet for a special summit late on Friday to put their political stamp of approval on the EU-IMF deal to release 110 billion euros over three years to help Greece overcome its debt and deficit crisis.

Even upbeat data from the United States, a major metals consumer, showing that employment grew at the fastest pace in four years in April, failed to lift sentiment. [ID:nN06115059]

MORE DOWNSIDE

Inventories of copper point to a bullish picture, with stocks falling to 490,875 tonnes, down about 0,000 tonnes since the middle of February. <0#LME-STOCKS>

Aluminum stocks have fallen to 4.506 million tonnes, since hitting a record high above 4.640 million tonnes in January. Aluminum CMAL3, used in transport and packaging, fell as low as $2,050 a tonne, its lowest since Feb. 12 and closed at $2,072.5 a tonne versus $2,104.

But analysts warn the fundamentals may not matter at all, even for months.

"Greece and the fear of contagion will likely overhang sentiment for months to come," analyst Nick Moore at RBS said in a research note. "Despite the price declines, I still expect more downside notably zinc and nickel (15-20 percent), copper and aluminum are likely to be the most resilient."

Steel-making ingredient nickel CMNI3 rose to $22,550 a tonne, from $22,000. The star performer of the year has lost some 18 percent since mid-April. Battery material lead CMPB3 closed at 2,042 from $2,001, while tin CMSN3 was at $17,600 from $17,700. Zinc CMZN3 fell to $2,091 a tonne from $2,115.

Metal Prices at 1607 GMT

Metal Last Change Pct Move End 2009 Ytd Pct move

COMEX Cu 313.20 2.85 +0.92 334.65 -6.41

LME Alum 2085.00 -19.00 -0.90 2230.00 -6.50

LME Cu 6910.00 -40.00 -0.58 7375.00 -6.31

LME Lead 2035.00 95.00 +4.90 2432.00 -16.32

LME Nickel 22250.00 250.00 +1.14 18525.00 20.11

LME Tin 17550.00 -150.00 -0.85 16950.00 3.54

LME Zinc 2090.00 -25.00 -1.18 2560.00 -18.36

SHFE Alu 15475.00 -325.00 -2.06 17160.00 -9.82

SHFE Cu* 54500.00 -1430.00 -2.56 59900.00 -9.02

SHFE Zin 16655.00 -600.00 -3.48 21195.00 -21.42

** 1st contract month for COMEX copper * 3rd contract month for SHFE

AL, CU and ZN SHFE ZN began trading on 26/3/07

(Source: Reuters, By Chris Kelly and Michael Taylor, Additional reporting by Humeyra Pamuk in London; editing by Sue Thomas and Marguerita Choy)