SINGAPORE: London copper declined 1 percent on Monday, extending a fall of 3.2 percent in the previous session, as mounting worries about stalled economic growth in the West outweighed robust growth in China's copper imports data.
Asian stocks fell and the euro remained under pressure after the resignation of Juergen Stark from the European Central Bank board on Friday fuelled fears over Europe's ability to tackle the sovereign debt crisis.
Underlining the weak sentiment in copper amid growing uncertainties in global economic growth, some European and US clients have asked to cancel orders from Chile's Codelco, the world's top copper producer, on fears of a downturn in demand.
"The euro cracked and risk has cracked," said a Singapore-based trader. "The foreign exchange market has taken a turn to the worse and base metals are going to be shattered today."
The euro hit a six-month low against the dollar and a 10-year trough on the yen on Monday.
Three-month copper on the London Metal Exchange declined to a three-week low of $8,705.75 a tonne, before regaining some lost ground to $8,728 by 0250 GMT.
LME copper has fallen nearly 6 percent so far this month, after losing 5.6 percent in August.
The Shanghai market is closed on Monday for the mid-autumn festival holiday.
Even an improving imports number from China failed to lift the sentiment. China's copper imports rose 11 percent from a month earlier to 340,398 tonnes in August, official customs data said.
"The imports data is very bullish, considering that in late June and early July when these purchases were made, prices were high and arbitrage was not favourable," said David Thurtell, a Citigroup analyst.
But the euro zone debt crisis has overwhelmed investors, even though copper fundamentals remain favourable in light of China's strong import numbers and recent labour disputes in Peru and Indonesia, he said.
"If euro zone concerns escalate, copper could head towards the lower $8,000s," said Thurtell.
LME aluminium fell to $2,350, its lowest since Aug. 25, and traded down 0.7 percent at $2,350.25.
Aluminium stocks held at three major Japanese ports at the end of August stood at their highest level since May 2009, boosted by the arrival of delayed shipments from July, an official at trading house Marubeni Corp said on Monday.
Copyright Reuters, 2011
Comments
Comments are closed for this article.