Copper edged down on global economic concerns

SHANGHAI: Copper edged down in late Asian trading hours on Monday, weighed down by lingering concerns about a slowdown in the global economy and debt problems in the eurozone.

Investors are also eyeing an expected speech on US monetary policy by Federal Reserve chairman Ben Bernanke on Friday, and European factory activity data due on Tuesday.

Three-month copper on the London Metal Exchange was down 0.1 percent to $8,820.25 a tonne by 0358 GMT, after rising 0.6 percent in the last session.

The most-active November copper contract on the Shanghai Futures Exchange fell 0.7 percent to 65,910 yuan per tonne, after falling 0.5 percent in the last session.

"Overall, there isn't a lot of conviction out there and sentiment has really taken a turn for the worse. The market seems to be range trading ahead of the very important PMIs tomorrow out of the Eurozone, Germany and France and things are pretty much on hold," said Citigroup analyst David Thurtell.

"The other focus is on what Bernanke is going to say at Jackson Hole. I see LME copper trading within a range of $8,700-$8,890 today."

Market players are awaiting Bernanke's speech on Friday at a lodge in Wyoming's Jackson Hole, where policymakers and academics meet once a year to talk shop.

He is expected to comment on the state of the US economy and may reveal the country's next monetary policy.

In Europe, worries over a global economic slowdown and the Eurozone's debt problems still weighed.

Some European banks were forced to pay more for short-term loans on Friday as anxiety about their exposure to debt problems in Europe stayed high.

Germany strongly rejected mounting calls for the euro zone to issue joint debt at the weekend, but signalled it was open for the bloc to move towards a form of fiscal union, with the finance minister saying he personally supported a European counterpart.

The eurozone's debt crisis will hurt China by sapping demand for exports, the nation's top official newspaper said on Monday.

But it added that Beijing's relatively small holdings of euro assets will limit any damage to foreign exchange reserves.

Investors are eyeing more possible supply disruption after the labour union at the world's No. 3 copper mine, Chile's Collahuasi, threatened to stage a one-day stoppage on Sept. 2.

But analysts said that while the market is watching the situation, it is not reacting to it for now.

"For now, it's only going to be a one-day stoppage and the market's pretty much unfazed really. I don't think the market is paying that much attention. Things may get more serious only when the union comes out to say that they are extending the strike," Thurtell said.

In copper industry news, China's imports of refined copper rose 8.8 percent to a six-month high in July on spot shipments booked in May and June.

Some analysts have slightly revised demand growth forecast for copper given the deteriorating global economic outlook but maintain that there will be an upside to prices from current levels.

Copyright Reuters, 2011