Bareksa.com - London copper steadied on Thursday amid doubts over the momentum of global economic growth and its impact on metals demand, while nickel prices sank further after a chunky build in exchange stocks.

Jitters over the ability for some smaller Chinese companies to obtain credit after a crackdown by banks on metals financing, following allegations of fraud in the port of Qingdao, also made copper a target for short sellers, traders said.

"The market wants to believe a recovery is underway and demand is there for an increase in primary imports to the U.S.," said Jonathan Barratt, chief executive of commodity research firm Barratt's Bulletin in Sydney.

"But when you look at the price of iron ore, and that copper has only recent bounce, it tells you a different story. The jury is still out."

Three-month copper on the London Metal Exchange traded flat at $6,711 a tonne by 0720 GMT, after finishing little-changed in the previous session.

LME copper hit its highest in almost two weeks at $6,744 a tonne on Wednesday.

The most-traded August copper contract on the Shanghai Futures Exchange slipped by 0.2 percent to 48,090 yuan ($7,700) a tonne.

China's CITIC Resources Holding Ltd said on Wednesday a court has been unable to secure more than 100,000 tonnes of alumina stored at Qingdao port, deepening fears that firms exposed to a metals financing scam at the port could face big losses.

A Singapore-based trader said worries that companies in China which were not granted letters of credit may default were behind the selling. "This has been enough for the specs to weigh in sell side SHFE," he said.

LME zinc dropped from 16-month highs of $2,148 a tonne reached on Wednesday, while nickel slumped more than 2 percent at one point.

LME nickel stocks surged by 19,242 tonnes across diverse locations in Asia to a record high. Traders said the deliveries reflected metal sold when prices climbed above $20,000 a month earlier.

The Federal Reserve on Wednesday expressed confidence the U.S. economic recovery was on track and hinted at a slightly more aggressive pace of interest rate increases starting next year.

Still, supporting copper prices, Chinese Premier Li Keqiang said on Wednesday that China's economy would not suffer a hard-landing and would continue to grow at a medium-to-high pace in the long term without strong stimulus.

Aston Bay Holdings Ltd, a Canadian mineral exploration company, said on Wednesday it had signed a preliminary deal with Antofagasta Plc for the two to partner on Aston Bay's promising Canadian Arctic copper project. (Source : Reuters)