SINGAPORE: Copper edged down on Thursday, extending losses from the previous session due to a firmer dollar and lingering concerns of a slow demand recovery in China, the world's top consumer of the metal.
The dollar rose to its highest in nearly two months against a basket of currencies, weighing on commodities priced in the greenback by decreasing the purchasing power of investors holding other currencies.
London copper prices have seesawed between $8,400 and $8,600 so far this week, as investors weigh an overall improved global economic growth outlook against the disappointing copper demand recovery in China.
"Any positive headline on the macroeconomy bodes well for copper but eventually the market needs to heed the fundamentals. For copper, that is Chinese demand," said Zhu Bin, an analyst at Nanhua Futures in the eastern Chinese city of Hangzhou.
"The demand this year is not looking particularly good, as the cycle of rapid economic growth driven by fixed asset investment is over and export-driven growth is also easing."
Premier Wen Jiabao said on Wednesday China must embrace slower growth and bolder political reform to keep its economy from faltering. He also dampened hopes for any near-term easing measures in the country's property sector.
Three-month copper on the London Metal Exchange edged down 0.2 percent to $8,445 a tonne by 0326 GMT, extending the 1-percent slide in the previous session.
The most-traded June copper contract on the Shanghai Futures Exchange lost 0.4 percent to 60,290 yuan ($9,521) a tonne.
Zhu expects London copper prices to remain rangebound in the short term, with a possibility of them testing $9,000 on more upbeat economic data.
LME copper has risen 11 percent so far this year, after a 21 percent slide in 2011, on an improved situation in Europe, brightened economic outlook in the United States and hopes that easy monetary policies around the world would buoy asset prices.
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