Goldman Says Copper Looks 'Attractive' After Selloff (Update1)

May 10 (Bloomberg) -- Copper is looking "attractive" after the recent selloff, according to Goldman Sachs Group Inc.

"Copper fundamentals, which have begun to tighten, will likely continue to do so as developed markets demand continues to improve against slowing but still robust emerging markets demand," the bank said in an e-mailed report.

Copper will be the first of the metals to hit supply constraints on a sustained basis, the bank's analysts including Jeffrey Currie wrote in a report today.

The metal had its worst week in three months last week on concern that Europe's debt crisis may derail the global economic recovery. Copper for three-month delivery on the London Metal Exchange rose as much as 2.2 percent to $7,100.75 a metric ton today, after tumbling 6.5 percent last week.

Copper prices more than doubled last year as government stimulus packages, including China's $586 billion program, drove demand. Copper has fallen 4.1 percent this year on concern that China's measures to rein in lending and curb property speculation will curb demand for the metal used in construction and automobiles.

The fundamentals for zinc are expected to "tighten meaningfully" in the next 12 to 24 months, "hastened by mine retirements," the analysts wrote.

"These fundamental views suggest that price risk is skewed to the upside for copper in the near-to-medium term and for zinc in the medium-to-longer term, especially given the magnitude of the recent pullback," they wrote. "Consumers should view price dips in these metals as buying opportunities, with recent price action providing a compelling opportunity for copper in particular."