(Updates prices) By Eric Onstad LONDON, July 18 (Reuters) - Copper and other industrialmetals prices bounced on Monday as bearish investors bought backpositions following news about government support for theeconomy in top metals consumer China, with further supportcoming from a weaker dollar. Three-month copper on the London Metal Exchange(LME) had gained 3.3% to $7,427 a tonne by 1615 GMT, reboundingafter hitting $6,955 in the previous session, its lowest pricesince November 2020. U.S. Comex futures surged 3.4% to $3.35 per lb.
LME copper has shed about 32% since touching a record peakof $10,845 a tonne in early March, on worries about a slowdownin China and aggressive interest rate hikes that could spur aglobal recession. Industrial metals have the risk of further weakness, saidOle Hansen, head of commodity strategy at Saxo Bank inCopenhagen. "This is still a bear market bounce, and it's too early topredict whether this will turn into consolidation and arecovery," he said. Positioning data showed that speculators were alreadytrimming their short positions last week, Hansen said. "The market was increasingly oversold, where short-sellerswere looking for an excuse to cover shorts and they found thattoday with the China story and the weaker dollar."
In China, regulators stepped up efforts to encourage lendersto extend loans to qualified real estate projects as thebeleaguered property sector faced fresh risks from a wideningmortgage-payment boycott on unfinished houses. China's central bank will step up the implementation of"prudent monetary policy" to support the real economy, itsgovernor said on Saturday. Copper also got a boost from news that CMOC's Tenke Fungurume copper and cobalt mine has suspended allexports, complying with demands by a court-appointedadministrator. Also supporting metals prices was a weaker dollar index , which makes commodities priced in the U.S. currencycheaper for buyers using other currencies. LME zinc advanced 2.7% to $2,994 a tonne, alsoboosted by a tight supply picture. LME data on Monday showed zinc inventories dropped to a fresh low since April 2020, having fallen by 64%over the last seven months. In other metals, LME aluminium climbed 3.8% to$2,414 a tonne in its biggest one-day rise since March 23,nickel raced 6.5% higher to $20,650, lead rose2.6% to $1,995, but tin slipped 0.5% to $24,730.
* For the top stories in metals and other news, click or ($1 = 6.7484 yuan) (Reporting by Eric OnstadEditing by Bernadette Baum, Paul Simao and Barbara Lewis)
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