MELBOURNE: London copper slipped in thin trade on Thursday on growing worries that a renewed Greek debt crisis could jolt the euro zone, while trade in general flattened out as demand slowed ahead of the Lunar New Year.
"I have been surprised how well copper has held against the issues in Greece and also the drop in oil prices," said strategist Daniel Hynes of ANZ in Sydney.
"It does look increasingly like the issues in Greece appear to be contained. I am more concerned about what is going on in China."
Hynes said weaker-than-expected Chinese inflation data ahead of the lunar new year had sparked speculation about the measures China may take to support its economy. The potential for a rate cut was likely to keep short sellers at bay, he said.
"I'm still optimistic we'll see some post-Chinese new year activity in terms of both Chinese import demand and industrial activity in general, though my expectations have been tempered a bit by the recent weak data points."
Three-month copper on the London Metal Exchange was flat at $5,598.50 a tonne by 0323 GMT, after finishing flat in the previous session. A rebound in prices from 5-1/2 year lows of $5,339.50 tipped in late January has lost steam ahead of Lunar Year. Markets will be closed for a week from Feb. 18.
The most-traded April copper contract on the Shanghai Futures Exchange slipped 0.2 percent to 40,940 yuan ($6,549) a tonne.
Greece's new leftist government and its international creditors failed to agree on a way forward on the country's unpopular bailout and will try again on Monday, with time running out for a financing deal.
Officials at the Federal Reserve are debating a historic shift in one of its core economic gauges that could lead the US central bank to move even more slowly than now thought once it lifts its rates from rock bottom levels.
The United States on Wednesday launched a legal challenge to Chinese export subsidies supporting billions of dollars of exports across a wide swathe of industries from steel to shrimp.
Turnover in copper options on the London Metal Exchange spiked last month to its highest in three years, data released on Wednesday showed, as investors rushed to guard against steeper losses during the market's worst rout in years.
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