The most-traded March copper contract on the Shanghai Futures Exchange slipped 0.1 percent to close at 35,100 yuan ($5,335) a tonne on Tuesday with a fresh tumble in oil prices underlining worries over a slackening global economy. Oil's slide back below $30 a barrel fuelled another selloff in Asian stocks, with Chinese stocks slumping more than 6 percent.
Weak demand from top copper consumer China remains a key concern for the metal, said Helen Lau, analyst at Argonaut Securities in Hong Kong, muting the impact of recent output cuts by global producers. Citigroup expects base metal prices to trend slightly lower in the first half of 2016 on concerns over China and falling oil prices. But the US investment bank sees modest price support for copper in the second half on "supply adjustments and a very modestly improving demand environment".
Freeport McMoRan Inc is yet to pay a $530 million deposit for a new Indonesian smelter, which the government is demanding before renewing the US company's export permit for copper concentrate, a mines ministry official said. The potential for disruption of exports from Freeport's Indonesian mine helped provide a floor to copper prices on Tuesday, added Lau, but said the impact is relatively small with the market still predicting a global surplus this year. "It is also unlikely for Freeport to not pay that deposit, they certainly want to export so they will negotiate," she said. Freeport Indonesia produces about 220,000 tonnes of copper ore per day, of which about a third usually goes to its domestic smelter at Gresik, with the rest exported as concentrate.
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