SHANGHAI: London copper eased on Tuesday on sluggish post-holiday purchases from top consumer China but investors betting on a bailout deal for Greece, and growing hopes of a global economic recovery, buttressed prices.
Three-month copper on the London Metal Exchange fell 0.35 percent to $8,470 a tonne by 0308 GMT, clawing back some losses from the previous session when it slipped by almost one percent. Copper hit a one week-high of $8,598.50 on Friday and rose for the fourth consecutive week last week.
The most-traded copper contract on the Shanghai Futures Exchange (ShFE) edged down half a percent to 60,220 yuan a tonne.
"It's all Greek related right now, there's nothing fundamentally to move the markets in terms of Chinese demand," US-based analyst Ed Meir of INTL-FC Stone said.
"Markets will discount some sort of agreement and the firmer tone will probably carry on until we have the next big shoe drop -- the Chinese trade data for January could be significant," he added.
German Chancellor Angela Merkel told Greece on Monday to make up its mind fast on accepting the painful terms for a new EU/IMF bailout, but the country's political leaders responded by delaying their decision for yet another day.
On the demand side, Chinese trade data is due later this week, with markets keeping a close eye on copper imports which hit a record high in December, when arbitrage and financing opportunities burnished the metal's appeal.
China is the world's largest copper consumer, and monthly import figures have been climbing since June 2011.
But imports are expected to be weaker in January in part due to Lunar New Year holidays and as slower manufacturing weakened demand. How much weaker will be a key point watched by the market, given signs of sluggish post-holiday consumption.
"It's all very dull. The spreads are still rubbish, the arb is well and truly closed. Premiums are soft," a trader at a Western bank based in Singapore said.
The trader was talking about the ShFE copper forward curve, where front month prices remain at a steep discount to third month prices, and the price differential between LME and ShFE copper, which makes imports unprofitable at the moment.
Analysts also said a lack of consumer interest added to any fresh worries over European debt could fuel a correction in prices which many believe have outrun fundamentals for now.
"The latest data from the Shanghai Futures Exchange showed that inventories have continued to increase rapidly and physical premiums are easing as well," Credit Suisse Private Banking said in a note.
"Sentiment could turn out to be fairly shaky in the days ahead."
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