SYDNEY: London copper futures fell on Monday after hitting their lowest levels in six months in the previous session, hurt by worries over rising stocks, China's economic growth and the impending end of US monetary stimulus.
Copper has some of the weakest fundamentals among base metals as a wave of fresh supply works its way into the market.
Traders said expectations that copper would benefit from strong US economic data and Wall Street's rally on Friday - the Dow Jones Industrial Average surged 1.6 percent, the first increase following six straight sessions of losses - dissipated early on in trading.
"Copper is looking weak from a supply and demand perspective," said a metals trader in Sydney. Last week's 17.5 percent increase in copper inventories monitored by the Shanghai Futures Exchange was pulling the metal down, the trader said.
Three-month copper on the London Metal Exchange had dropped 0.6 percent to $6,597 a tonne by 0700 GMT. It hit a six-month low of $6,530 on Friday but bounced back later in the day to close 1.3 percent higher.
The most traded December copper contract on the Shanghai Futures Exchange closed little changed at 47,070 yuan ($7,687) a tonne.
With the US Federal reserve set to turn off its money taps at the end of this month, investors are focusing on poor growth prospects in much of the world, something International Monetary Fund chief Christine Lagarde has termed a "new mediocre".
And Chinese data this week could show further deterioration in the world's largest copper-consuming country.
China's economy is likely to have grown at its weakest pace in more than five years in the third quarter as a property downturn weighed on demand, a Reuters poll showed, raising the prospect of more aggressive policy steps that may include a cut in interest rates. China will publish its GDP data on Oct. 21.
Negative sentiment on copper was only partly tempered by a spate of solid US economic data.
The Thomson Reuters/University of Michigan index of consumer sentiment was surprisingly strong in early October, rising to its highest in more than seven years. Other data showed new housing starts climbed more than expected last month, suggesting US economic growth was solid.
Elsewhere in metals futures, aluminium was bid $4 lower at $1,968 a tonne. Earlier on Monday it hit a near one-month high of $1,979.25 a tonne.
Three-month nickel fell $50 to $15,650 a tonne.
News that Marcventures Holdings Inc, one of the Philippines' biggest nickel miners, had been granted approval to expand its mining operations, helping it to ramp up ore exports to China, clouded nickel's outlook.
Nickel had found support from a ban by Indonesia in January on nickel ore exports, much of which went to China.
"This is another example of the impact of the ban being negated," said the Sydney trader.
Joko Widodo took over as the new president of Indonesia on Monday and is expected to maintain the ban introduced under the previous administration.
Analysts estimate the ban removed a third of global nickel mine supply. South Pacific countries are also vying to play a bigger role in supplying nickel.
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