NEW YORK/LONDON, March 14 (Reuters) - Copper prices bounced from near three-month lows to end flat on Monday, but sentiment remained fragile amid concerns over the global economic impact from Japan's devastating earthquake and tsunami.
Despite copper's ability to stabilize from the recent wave of risk reduction, investors continued to side with caution, fearing the crisis in Japan, the world's third largest economy, could derail the global economic recovery.
"How much of an overall economic impact all this is going to have is keeping buyers pushed to sidelines at the moment," said Sterling Smith, an analyst for Country Hedging Inc in St. Paul, Minnesota. "For now we can expect the velocity of the global recovery to be slowed a little bit by this."
London Metal Exchange copper for three-month delivery CMCU3 eked out a $5 gain to close at $9,195 a tonne, extending a recovery from Friday's three-month low at $8,992 a tonne.
London's positive tone, however, failed to attract buyers in New York, where May copper HGK1 fell 2.10 cents to finish at $4.1865 per lb.
"The market is very confused at the moment. There is a big question mark over global growth and end-users' demand for industrial metals," said Numis Securities base metals analyst Andy Davidson. "It's all very sentiment-driven at the moment."
Copper exports from top producer Chile are unlikely to suffer from Japan's disaster, as tight global supply means shipments can easily be rerouted to alternative markets.
Even if buyers in Japan are forced to declare force majeure after Friday's quake, which shut down smelters in the hardest-hit zones, top consumer China can absorb the slack.
In the longer term, reconstruction efforts in Japan were expected to spur greater demand for industrial metals.
"The disruption to industrial sector activity is likely to have a negative impact on the industrial metals and bulk commodity sectors," Deutsche Bank said in a note. "However, we expect attention will turn to reconstruction. We would expect copper and zinc would be the principal beneficiaries of a large-scale reconstruction programme."
Japan produced about 1.52 million tonnes of copper last year, about 7 percent of global output. The smelters that produce this copper have shut operations because of power outages.
Adding to the negative demand outlook was data from China showing money growth and bank lending slowed sharply in February due to tighter monetary policy to rein in inflation.
In the meantime, premiums for physical copper in Europe held at two-year lows of $40 a tonne this week, about half the value of levels recorded in January, as traders said high prices deterred interest from China.
In other metals, three-month aluminium CMALS ended up $10 at $2,555 a tonne, zinc CMZN3 rose $54 to $2,330, and lead CMPB3 climbed $95 to $2,520, while nickel CMNI3 shed $245 to $25,850 a tonne.
Tin CMSN3 closed up $400 at $29,900 per tonne, supported by declining exports from Indonesia.
Indonesia's refined tin exports fell nearly 12 percent in February from a year earlier as rains hampered mining, trade ministry data showed.
Metal Prices at 1:10 p.m. EDT (1710 GMT)
COMEX copper in cents/lb, LME prices in $/T and SHFE prices in
Metal Last Change Pct Move End 2010 YTD Pct
COMEX Cu 419.50 -1.25 -0.30 444.70 -5.67
LME Alum 2557.00 12.00 +0.47 2470.00 3.52
LME Cu 9185.00 -5.00 -0.05 9600.00 -4.32
LME Lead 2518.00 93.00 +3.84 2550.00 -1.25
LME Nickel 25820.00 -275.00 -1.05 24750.00 4.32
LME Tin 29850.00 350.00 +1.19 26900.00 10.97
LME Zinc 2329.00 53.00 +2.33 2454.00 -5.09
SHFE Alu 16665.00 -95.00 -0.57 16840.00 -1.04
SHFE Cu* 69280.00 60.00 +0.09 71850.00 -3.58
SHFE Zin 18045.00 300.00 +1.69 19475.00 -7.34