KUALA LUMPUR: London copper slipped on Tuesday after posting its biggest decline in three weeks in the previous session as investors shifted to dollar holdings in disappointment over Europe's plan to pull out of its debt crisis.
Three-month copper on the London Metal Exchange was down 0.1 percent at $7,600 a tonne by 0708 GMT, after tumbling 2.6 percent in the previous session.
The most-traded February copper contract on the Shanghai Futures Exchange dropped 1.1 percent to 56,120 yuan ($8,800) a tonne.
"Fundamentals still look OK, when we look at China's data, but Europe's troubles are not going to be fixed in the next week, month or quarter," said Mark Pervan, head of commodities research at ANZ Research in Melbourne.
"In the next six months, it's going to be a rocky road for commodities."
The euro zone debt crisis has also made lenders more cautious about lending for commodities trading, cutting liquidity in the markets, traders and analysts said.
"Everyone's certainly more risk-averse," Pervan said.
DOLLAR STEADY
The dollar was steady against a basket of currencies after climbing on Monday to the highest in two weeks. A stronger US currency makes it more expensive for investors to buy commodities denominated in the greenback.
Copper on the LME has fallen 21 percent this year, snapping two annual gains, as Europe's crisis threatens to slow growth from China to the United States.
The decline in prices was limited by output disruption at some of the biggest mines in the world, including Freeport McMoRan Copper & Gold Inc's Grasberg in Indonesia and Cerro Verde in Peru.
Freeport and its Indonesian workers' union expect to sign a pay deal on Tuesday to end a three-month strike that has crippled production at the world's second-biggest copper mine, two sources told Reuters.
The two sides have agreed to a pay rise of 40 percent over two years to end Indonesia's longest-running industrial dispute, and will sign the agreement in Jakarta, said the sources, who declined to be identified because the deal was not public.
Freeport did not immediately respond to Reuters' queries for comment. It was not clear when the US miner would be able to resume production or end a force majeure on exports, which was declared in October and helped boost copper prices.
CHINA'S POSITIVE DATA
Data from China failed to boost prices of the metal used in power and construction in the previous session.
China's copper imports in November reached their highest level since March 2010, rising 17.9 percent on the month to 452,022 tonnes, preliminary data from China's General Administration of Customs showed on Saturday.
The euro wallowed at two-month lows in Asia on Tuesday, while commodity currencies also nursed heavy losses as investors braced for a possible mass downgrade of euro zone sovereign credit ratings as soon as this week.
Moody's Investors Service and Fitch Ratings on Monday warned that last week's EU summit, billed by some as a last chance to save the euro, has not gone far enough to ease immediate concerns on the region's debt markets.
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