MANILA: Copper steadied on Tuesday, surrendering early gains that were spurred by a softer dollar, with a fresh tumble in oil prices underlining worries over a slackening global economy.
Oil's slide back below $30 a barrel fueled another selloff in Asian stocks, with Chinese stocks slumping more than 6 percent.
Three-month copper on the London Metal Exchange was little changed at $4,413.50 a tonne by 0723 GMT, well off a session high of $4,450.
Copper climbed to a two-week high of $4,484 on Friday as oil prices surged 10 percent. But crude resumed its downturn amid concerns on an oversupplied market and a faltering Chinese economy.
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.
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.
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 U.S. investment bank sees modest price support for copper in the second half on "supply adjustments and a very modestly improving demand environment".
The dollar also weakened on Tuesday as investors were cautious ahead of the outcome of the Federal Reserve's two-day policy meeting that kicks off later in the day.
The Fed is widely expected to leave U.S. federal funds rate unchanged at 0.25-0.50 percent. But the probability of another rate increase at the next Fed meeting in March has eased with some analysts seeing it postponed to later in the year, amid a slowing global economy.
Freeport McMoRan Inc is yet to pay a $530 million deposit for a new Indonesian smelter, which the government is demanding before renewing the U.S. 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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