SHANGHAI, July 13 (Reuters) - Copper steadied on Friday after briefly hitting a one-week high as investors digested the news that China's economy grew at its slowest pace in three years in the second quarter, boding ill for demand for industrial metals from the world's top consumer.
Three-month copper on the London Metal Exchange rose to $7,605.50 per tonne, its highest since July 6, but pared gains afterwards, trading 0.3 percent up at $7,575 per tonne by 0411 GMT, on track for a slight 0.6 percent gain for the week.
The most-active October copper contract on the Shanghai Futures Exchange rose 0.5 percent to 55,420 yuan ($8,700) a tonne and is on track to end the week down 0.6 percent.
China's GDP grew 7.6 percent, in line with forecasts, but the data also confirmed that the economy is on course for its softest showing since 1999.
These Chinese data further dampens the outlook of the global economy especially after there were signs that the euro zone debt crisis was starting to hurt stronger economies there.
"London copper lost momentum after a brief rise as China's Q2 GDP was just reasonable. If it had been much better or worse than expected, prices might have shot up more either on optimism over China's economy or on hopes of more stimulus," said CIFCO Futures analyst Zhou Jie.
Investors are expected to remain cautious and copper prices are seen trading between $7,400 and $7,600, analysts said.
By its midday close, the ShFE October copper contract had a small net open interest of 2,618 lots, despite an unusually large trading volume of 159,100 lots, which traders said was proof of investors' wariness.
"Traders entered and exited positions within minutes, content with profits of around 10 yuan a tonne each time," Zhou said.
Some analysts interpreted the latest indication of the slowdown in China's economy as a sign that the government will introduce more measures to maintain growth, which should help support copper prices.
"I think China should be able to hit 8 percent GDP growth this year although the economy should continue to be weak in the second half of the year. But downside room for copper should be limited as the government will likely keep stimulating the economy," said Orient Futures derivatives department director Andy Du.
Base metals prices at 0411 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7575.00 20.00 +0.26 -0.33
SHFE CU FUT OCT2 55420 270 +0.49 -0.38
LME Alum 1884.00 2.00 +0.11 -6.73
SHFE AL FUT OCT2 15480 10 +0.06 -2.27
HG COPPER SEP2 343.40 1.90 +0.56 -0.06
LME Zinc 1852.00 9.00 +0.49 0.38
SHFE ZN FUT OCT2 14715 70 +0.48 -0.54
LME Nickel 15880.00 105.00 +0.67 -15.13
LME Lead 1867.00 11.00 +0.59 -8.26
SHFE PB FUT 14930 60 +0.40 -2.35
LME Tin 18500.00 0.00 +0.00 -3.65
LME/Shanghai arb 1089
Shanghai and COMEX contracts show most active months
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 6.3733 Chinese yuan)