SHANGHAI, May 21 (Reuters) - Copper on Monday extended gains from the previous session when bargain-hunting and short-covering from investors pushed it up from four-month lows.
But market participants were still jittery about Europe's debt woes, with political problems threatening to drive Greece out of the euro zone and Spain's banks remaining mired in debt.
Three-month copper on the London Metal Exchange had risen 0.6 percent to $7,695.25 a tonne by 0110 GMT, after inching up on Friday.
The most-active August copper contract on the Shanghai Futures Exchange climbed 0.8 percent to 55,650 yuan ($8,800) a tonne, after falling 0.4 percent the session before.
Financial markets recovered some ground on Monday after heavy losses last week, but investors remained wary about the euro zone despite G8 leaders calling for Greece to stay in the monetary union and for Europe to balance austerity with growth.
European officials are working on contingency plans in case Greece bombs out of the euro zone, the EU's trade commissioner said on Friday.
Copper net longs among money managers monitored by the Commodity Futures Trading Commission (CFTC) fell by the largest amount since start of April, reflecting weakening confidence in commodities markets and mounting concerns on euro-zone concerns.
The euro started the week on a subdued note and commodity currencies remained mired at multi-month lows as investors found little comfort in the G8's pledge to take all steps necessary to combat financial turmoil.
1230 U.S. Chicago Fed National Activity Index for April
Base metals prices at 0110 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7695.25 45.25 +0.59 1.25
SHFE CU FUT SEP2 55650 420 +0.76 0.04
LME Alum 2062.00 -6.00 -0.29 2.08
SHFE AL FUT SEP2 16085 65 +0.41 1.55
HG COPPER JUL2 347.80 0.95 +0.27 1.22
LME Zinc 1912.00 17.00 +0.90 3.63
SHFE ZN FUT AUG2 14975 120 +0.81 1.22
LME Nickel 16940.00 115.00 +0.68 -9.46
LME Lead 1966.75 0.75 +0.04 -3.35
SHFE PB FUT 15200 125 +0.83 -0.59
LME Tin 19645.00 0.00 +0.00 2.32
LME/Shanghai arb 1077
Shanghai and COMEX contracts show most active months
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 6.3284 Chinese yuan)