The most-traded May copper contract on the Shanghai Futures Exchange fell 0.4 percent to 59,520 yuan ($9,500) a tonne on Monday. "It is a positive reaction (to China's policy easing), but we still have to see how sustainable these gains can be - we would need to see more signs of improving demand from the physical market," Singapore-based analyst Stefan Graber of Credit Suisse Private Banking said.
"The event that will set the tone for this week is the euro group meeting. Markets are expecting a positive outcome. In previous weeks we have seen that it is very difficult to reach a solution for Greece, so it's not wrong to be a bit cautious."
China's central bank cut the amount of cash that banks must hold in reserves on Saturday, which is expected to boost lending capacity by more than $50 billion, in a bid to crank up credit creation as the world's second-biggest economy faces a fifth successive quarter of slowing growth.
Traders said China's easing steps may still take some time to filter down to metals product makers, with one major domestic trader saying he expects only ancillary impact on his business as such steps do not translate directly into better access to loans. "The RRR cut is definitely positive. Copper picked a lot from Friday's close and the arb ratio improved a lot at the start of opening, though it retreated quickly," one Shanghai-based trader said.
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