London copper prices fell 1.5 percent on Monday, after shedding 2.2 percent in the previous session, as a firm dollar, worries about demand and the form of a US plan to quarantine toxic debt weighed on sentiment. London Metal Exchange copper fell $100 to $6,675 a tonne by 0648 GMT, heading towards a nine-month low of $6,625 struck earlier this month, and adding to Friday's $155 loss.
The Shanghai Futures Exchange will be shut this week for National Day holidays. "Sentiment is pretty soft across markets, but it's hard to short most base metals other than copper, which might have to catch up a little with the losses seen on other metals."
The dollar rose against the euro and the yen, depressing investor appetite for commodities, as hopes for the bailout spurred a rally in the US stock index futures. The euro fell 1.1 percent against the dollar to $1.4457 while sterling shed 1.1 percent to $1.8246 The dollar rose 0.4 percent against the yen to 106.35 yen.
PEFORMANCE: LME copper is up about 0.7 percent from the start of the year, while lead and zinc have lost around a quarter and nickel has plummeted 35 percent. US Congressional leaders from both parties said they had reached a tentative agreement on a $700 billion rescue plan, but questions remain whether it can restore confidence to shaky markets and head off a deep recession.
Analyst assessments of weak Chinese demand growth, particularly in the domestic housing and auto industries and across the wider export sector, also weighed on the market. But Citigroup said copper could shine next year, although the market also held the greatest risk among base metals.
"We have downgraded our commodity forecasts broadly by 20 percent, but our base case for copper is for it to average $3.65 a pound ($8,046 a tonne) next year. It's our preferred base metal, but it also carries the greatest risk," Alex Tonks, associate commodities analyst at Citgroup, said. He said that although copper demand was weak in most of the world, supply disappointments meant the market would likely be tight for the next couple of years.
LME copper stocks fell 350 tonnes on Friday, down for the fifth straight day as material left warehouses in Singapore and Malaysia, but at 200,175 tonnes, stocks are still two-thirds higher than in mid-June and enough for just under four days of world consumption. LME aluminium fell 0.8 percent to $2,475. Inventories continue to rise, climbing above 1.37 million tonnes for the first time since early 2004, enough for 13 days of world consumption.
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