SHANGHAI: London copper futures eased on Thursday in cautious trade ahead of a key bond auction in Spain amid growing worries the euro zone debt crisis is resurfacing, dimming the outlook for global raw material demand.
Three-month copper on the London Metal Exchange ticked down 0.2 percent to $8,033 a tonne by 0352 GMT, after ending flat on Wednesday.
The most-active July copper contract on the Shanghai Futures Exchange shed half a percent to 57,520 yuan ($9,100) a tonne, after gaining more than 2 percent in the previous session.
"Copper prices haven't moved much as everyone takes on a wait-and-see attitude ahead of the Spanish bond auction. Balancing this piece of potentially negative news are investor hopes that Beijing will inject more liquidity into the economy and further loosening monetary policy," said Great Wall Futures analyst Li Rong.
Investors are eyeing an auction of two- and 10-year Spanish bonds later on Thursday. Its 10-year government bond yield shot above 6 percent earlier this week, raising fears that the country would not be able to manage its public financing and would have to turn to a global bailout.
Hopes for more Chinese monetary easing were also stirred by a report by China's official Xinhua news agency saying that the country may increase liquidity via open market operations and cutting banks' required reserves to steer the economy towards a soft landing.
In the meantime, Japan's exports rose in March from a year earlier for the first time in six months, mainly on the strength of US sales, but high fuel imports pushed the trade balance back into deficit and manufacturers remain cautious about business in months ahead.
On a positive note, the head of the International Monetary Fund said member countries had committed $316 billion toward new IMF resources to help contain the debt crisis in the euro zone.
But lingering fears over a slowing global economy remain, as data showed Spain's banks continued to battle sliding house prices and a looming recession. Their bad loans rose to their highest level since October 1994 in February, to 8.2 percent of their credit portfolios.
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