July 9, 2015 / 10:15 AM / 5 years ago

METALS-Copper gains on China equity rebound, concerns persist

* Chinese equities rally 6 percent on Beijing action

* European bourses, bonds make early gains on Greek hopes

* Concerns over Chinese growth persist, posing downside risk (Updates with official prices)

By Maytaal Angel

LONDON, July 9 (Reuters) - Copper prices rose on Thursday, extending a rebound from a six-year low hit in the previous session, as Beijing managed to halt panic selling in Chinese equities, though underlying worries about Chinese growth persisted.

Chinese stocks rallied 6 percent after the securities regulator banned selling by shareholders with large stakes in listed companies; Beijing’s most drastic step yet to stem a sell-off that has roiled financial markets.

China consumes 45 percent of the world’s copper.

European bourses and bonds made early gains as strong export figures from Germany and hopes that Greece’s debt negotiations will succeed complemented the rebound in Asia and commodity markets, but sentiment towards copper remained cautious.

“We could see continued weakness in the coming weeks, with the Greek situation unresolved and concerns regarding growth from China, (though) there’s a limit to how low copper can go because (global) growth will strengthen going into next year,” Danske Bank analyst Jens Pederson said.

Three-month copper on the London Metal Exchange climbed 1.3 percent to $5,589 a tonne in official trading. It had gained 3.4 percent in the previous session, having sunk at one point to its weakest since July 2009 at $5,240.

Helping copper was a weaker outlook for the dollar after the Federal Reserve signalled on Wednesday that it might be too soon to raise interest rates. A weaker dollar makes dollar-priced metals cheaper for non-U.S. investors.

The dollar recovered its poise versus the euro, however, with attention glued to proposals expected from Athens for a deal to keep Greece and its banks afloat.

“Metals direction will come down to how much the rout has hit broader sentiment in China. Where do the losses sit? Does this shake people’s confidence in the economy and make them not spend? That will depend on how much longer this goes on for,” said Dan Morgan, analyst at UBS in Sydney.

In other metals, tin was untraded in official rings and bid up 1.1 percent to $14,300 a tonne. Indicating the market might be tightening, cash tin traded at a premium of $54 a tonne to the three-month price CMSN0-3, its highest since November.

Nickel surged 3.2 percent to $11,315 a tonne, extending Thursday’s rally of more than 4 percent.

The market is still waiting for a long-touted drawdown in nickel inventories and the metal has shed more than a quarter of its value this year.

Aluminiuim gained 1.3 percent to $1,692 a tonne in official rings, zinc added 1.3 percent to $2,010 while lead, untraded in rings, was bid up 1.2 percent at $1,807.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

$1 = 6.2075 Chinese yuan Additional reporting by Melanie Burton in Melbourne and Eric Onstad in London; Editing by Dale Hudson and David Goodman

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