NEW YORK/LONDON, May 20 (Reuters) - Copper recovered from a 15-week low on Thursday, bucking tumbling stock markets and concerns about Europe's debt crisis after bouncing from chart levels that previously attracted Chinese demand.
Copper for July delivery HGN0 on the New York Mercantile Exchange's COMEX division ended down 1.50 cents at $2.9445 per lb, away from a session trough at $2.9005, its lowest level since Feb. 5.
"This $2.85 (per lb) area is where China came in and bought a big chunk of it in February, so there is that support down there," said Charles Nedoss, senior account manager and metals analyst with Olympus Futures in Chicago.
In after hours business, prices powered ahead and regained momentum back above the $3.00 per lb level, but the outlook remained uncertain as ever, analysts said.
"I'm not trusting that this rally goes anywhere," said Steve Platt, futures analyst with Archer Financial Services in Chicago. "The fact is, you're still looking at a surplus for this year."
That view was reinforced by data from the International Copper Study Group showing the global copper market in surplus of 148,000 tonnes in the first two months of the year.
On the London Metal Exchange, copper for three-months delivery CMCU3 ended at $6,610 a tonne from an earlier high of $6,719.75 a tonne and compared with a closing bid of $6,500 a tonne on Wednesday.
Prices of the metal used in power and construction have surrendered more than 13 percent since the start of the month, and remain vulnerable to further downside pressure as European debt contagion fears linger.
"There is a distinct lack of conviction in the market at present. The market needs to see the euro zone debt markets settle before risk is re-entered," said David Thurtell, analyst at Citi.
Global stocks, seen by some as a proxy for economic growth, fell on concerns about the risk of a wider correction and fears European countries will follow Germany and ban short selling in some instruments.
The Dow Jones Industrial Average .DJI fell 3.6 percent.
An unexpected rise in weekly U.S. jobless claims added to the negative sentiment.
Volatility has led investors to overlook recent positive economic data, particularly out of the United States, and focus on euro zone debt and the possibility of further monetary tightening in China, the world's top metals consumer.
"We do not believe that the physical market is likely to be too heavily influenced by this significant decline in investor sentiment," JPMorgan said in a note.
"But as industrial metals generally had front-run the improvement in actual demand, the prospect for material price rallies in the months ahead have been dealt a significant blow."
Aluminum CMAL3 dipped below its February low to hit $1,950 per tonne, matching a low last seen in late November 2009, before recovering in line with copper to close down just $10 at $1,991 a tonne.
Latest LME data showed aluminum stocks up 39,075 tonnes to total 4.58 million tonnes, bucking a trend of falls in all other base metals save for lead, which had unchanged stock levels.
Robin Bhar, analyst with Credit Agricole Corporate & Investment Bank, believed the increase in aluminum stocks was not connected to fundamental factors like falling demand.
"It's because there's a squeeze on shorts, so they're electing to deliver physical metal against their short positions. Markets should ignore these big stock increases, physical demand is good because premiums are high," he said.
Zinc CMZN3 closed at $1,875 a tonne, up from $1,860 on Wednesday, battery material lead CMPB3 was last bid at $1,745 from $1,755, tin CMSN3 ended down $55 at $17,395, and nickel CMNI3 finished at $21,200 from $21,300.