Copper declines

Copper prices fell on Tuesday as demand prospects dimmed due to diminishing hopes that a planned summit would provide a solution to Europe's debt crisis after Germany said it was unhappy with aspects of the draft deal and EU finance ministers cancelled a meeting.
EU leaders are to meet on Wednesday to discuss tentative plans for Greece's debt to be reduced, European banks to be re-capitalised and the eurozone's EFSF rescue fund to be increased to provide partial insurance for sovereign bonds. Germany said, however, it was opposed to a phrase in the summit draft that calls for continued European Central Bank non-standard measures, referring to the bank's secondary market purchases of bonds in struggling economies such as Italy and Spain.
Benchmark copper on the London Metal Exchange ended at $7,525 a tonne, down from a $7,635 close on Monday. Earlier, the metal used in power and construction hit a one-month high of $7,820 a tonne. "There's still no settlement. The full package won't be ready Wednesday. You'll see leaders going over and over that they're united etc-etc, but we need a coherent long-term plan," said VTB Capital analyst Andrey Kryuchankov. Underpinning copper in the face of economic headwinds was data on LME stocks, seen as an indicator of demand.
The latest figures showed warehouse stocks fell 5,125 tonnes to total 439,150 tonnes, the lowest since early April, while cancelled warrants - material set to leave warehouses - are at their highest in almost 2.5 years. Added to this, the discount for cash copper over the three-month benchmark price has narrowed to just $5.50, a level not seen since June, reflecting that near term supply is getting less easy to come by.
BlackRock Inc, the world's largest money manager, said widespread destocking of copper inventories in China had obscured underlying strong demand for the metal in the world's top consuming nation. Zinc, used in galvanising, ended at $1,842 a tonne from $1,876 on Monday's close, while soldering metal tin closed at $22,250 in from $22,500. Tin smelters in Indonesia, the world's top refined tin exporter, could impose a monthly quota that would slash shipments by about 40 percent, the Indonesian Tin Industry Association said, in a move to further boost prices.
Battery material lead, ended at $1,961 from $2,019, aluminium at $2,224 from $2,218 while nickel closed at $19,750 from $19,995, having earlier hit a one month high of $20,300. Aluminium Corp of China Ltd (Chalco), the country's top aluminium maker, said it reversed a year-earlier third-quarter loss as prices rose for the metal, used in industries from packaging to aerospace.