Copper prices dipped on Monday below $7,000 a tonne on a stronger dollar and Chinese selling after moves by top commodity consumer China to slow its economic growth, with many players staying on the sidelines to await direction.
London Metal Exchange copper for delivery in three months was at $6,960 a tonne, down $100 or 1.4 percent from Friday's London close. The metal had traded as low as $6,820, down $240 or 3.4 percent.
Market sentiment in Shanghai was weak after China's central bank said late on Friday that it would raise bank reserve requirements by half a percentage point, tightening money supply and slowing credit growth.
"I would say it's a pretty much lack of direction," said Rick Holmes, director of Mitsui Bussan Commodities in Sydney. "We had a good correction last week. I don't think it's going to be a resumption of the rally, but it will move towards the upper end of the range."
Copper prices, a barometer for industrial demand, have risen 58 percent since the end of last year.
On Friday, copper ended up $70 at $7,060, extending a rally for a third straight day as investors hunted for bargains after steep price declines in recent weeks on concerns about slowing global economic growth and inflation.
Historically low inventory levels and labours disputes in Mexico and elsewhere had also lent support. Prices for copper, used in construction and electronics, had fallen to $6,410 earlier last week, down as much as 27 percent from their May 11 peak of $8,800.
In electronic trade, copper for July delivery fell 7.25 cents to $3.2190 a lb after trading between $3.2050 and $3.3010 on the New York Mercantile Exchange's Comex division. Shanghai copper futures ended the session lower after volatile trade, with the most active September down 650 yuan from the previous close at 59,770 yuan ($7,471) a tonne.
It had dipped to 58,520 after trading as high as 62,000 yuan right. "All commodities (in Shanghai) were down because of the Chinese central bank's reserve requirements rates," said Sheen Haihua, vice president of Maike Futures in Shanghai.
"It also dragged down LME prices." Sheen said a large increase last week in Shanghai exchange's warehouse stocks also put pressure on copper futures. Copper inventories in the Shanghai Futures Exchange's warehouses jumped 10,810 tonnes to 62,344 tonnes in the week ended last on Thursday, the exchange said after the market closed on Friday.
Shanghai's most active September aluminium contract fell 380 yuan a tonne from the previous close to end the session at 20,090. LME aluminium eased to $2,540 from Friday's close of $2,550, while zinc was down $10 at $3,060 a tonne.
In other commodities, oil prices eased below $70 a barrel after losing 2.4 percent last week, while gold lost more than 1 percent towards $570 an ounce on the dollar's strength and weaker oil prices.
Shares of BHP Billion, the world's top miner, fell 1.2 percent and Rio Tinto, the world's number-two miner, lost 1.78 percent, while Zinifex, the world's number-two zinc producer, was down 5.48 percent.
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