Copper falls on weak Chinese data

Benchmark copper on the London Metal Exchange traded in rings at $9,630 a tonne, down 1.25 percent from $9,755 at the close on Wednesday.

The metal used in power and construction was less than 5 percent lower than a record high of $10,190 it hit on Feb 15.

"We are seeing a bit of weakness today despite a weaker dollar and despite the possibility of a preliminary solution of the Euro crisis," Eugen Weinberg, an analyst at Commerzbank, said.

"This is stemming mainly from China. The preliminary reading of PMI from HSBC is dampening a bit of optimism."

China's factory sector contracted for the first time in a year in July and at its fastest pace since March 2009, a purchasing managers' survey showed, as monetary policy tightening and slack global demand weighed on the economy.

Chinese monthly imports of refined copper rose 19.7 percent in June from a 30-month low seen in May, due to improved arbitrage and the arrival of contracted spot metal.

"On the other hand it is still possible that the Chinese government will continue to tighten its monetary policy given the rising inflation...this may cool demand for copper," Weinberg said.

Supporting copper, the euro edged up against the dollar after Germany and France agreed on a joint position for bailing out Greece, stoking hopes for real progress at the coming European summit after an array of false starts.

A softer US currency makes dollar-priced commodities less expensive for holders of other currencies.

Copyright Reuters, 2011