(Reuters) - Copper futures rose on Thursday off the previous session's three-week lows as some Chinese investors took advantage of the dip in prices to cover short positions and restock.
Gains, however, were capped by surprisingly weak import and export growth in China, which raised some doubts about growth prospects for the world's second-biggest economy, as well as the political and financial woes in the euro zone.
Investors were also cautions ahead of the release of some official Chinese figures for April, including the consumer price index, industrial output and retail sales.
Three-month copper on the London Metal Exchange rose 0.8 percent to $8,117.50 a metric ton (1.1023 tons) by 0704 GMT, after closing 0.5 percent lower in the previous session.
The most-active August copper contract on the Shanghai Futures Exchange rose 0.7 percent to close at 57,770 yuan ($9,200) a tonne.
China's copper imports fell in April, as widely expected, notching down 18.8 percent from March to an 8-month low, customs data showed, as a plentiful supply of the metal in the world's top copper consumer curbed its purchases on the international market.
We are seeing a technical rebound today after yesterday's fall in copper prices. Overall sentiment is bearish and negative news out of the euro zone can push prices down further in the longer term, said Orient Futures derivatives director Andy Du.
For now, price movements are limited by caution ahead of tomorrow's China data.
Market players said copper prices were also supported by steady buying of Chinese physical copper by some large institutions.
There is a slight pickup in demand by downstream consumers over the past few weeks, although this is still softer compared to previous second quarters. But the main buyers lately are large Chinese producers and some international traders, a Shanghai-based trader said.
We understand that the producers are buying to cover short contracts on the LME, she added.
Large Chinese copper smelters and trading firms said in a recent statement they would export refined copper cathodes to LME warehouses over the next two months to help ease tight global supplies and trim near-record stockpiles at home.
But any gains in copper prices will likely be limited by lingering fears over the euro zone.
Spain took over Bankia, the country's fourth-biggest lender, on Wednesday, aiming to dispel concerns over the government's ability to clean up the financial sector but there was a lot of uncertainty over how much is needed to recapitalize banks.
Greek Socialist leader Evangelos Venizelos will make a last- ditch attempt to form a government on Thursday and avoid a new election after voters rejected a bailout deal and pushed Greece into a political crisis.
(Reporting by Carrie Ho; Editing by Miral Fahmy)