Shanghai, LME copper slip

Shanghai copper contracts fell around 1.4 percent on Thursday, tracking losses on London prices, which extended declines from the previous session as concerns about falling US demand weighed on the market.
A stronger US dollar also weighed on base metals, although some traders predicted demand from China, the world's largest consumer of copper, would remain strong, preventing any near-term slide in prices. Chinese copper futures prices fell, with the most active February contract ending the session down 890 yuan at 64,080 yuan ($8,184) per tonne.
Shanghai spot copper prices ranged between 65,400 yuan to 65,700 yuan, down 875 yuan from the previous day. "Traders are testing the fluctuation limits for copper in Shanghai and London. I feel the trade in these two days may set the pace for the market this month," said Chen Ting, general manager at Zhejiang Day Futures Broker Co Ltd. "In my opinion, copper prices are inclined to rise a bit by the end of this year, as China's demand is still a driver," Chen said.
Copper for delivery in three months on the London Metal Exchange fell to $6,960 a tonne, against $6,990 at the London close on Wednesday, when it had softened more than 2 percent along with aluminium. A string of weak US economic data has traders eyeing falling demand for base metals such as copper, with many investors now bracing for the Federal Reserve to cut interest rates from 5.25 percent as many as three times next year.
Aluminium for three-month delivery was roughly steady at $2,777 against the close of $2,780 a tonne on Wednesday, when it weakened following the failure of a large number of calls options to lapse below a key level the market had been monitoring.
"People had rushed to buy the December date, but people wanted to sell back to the market once they realised the hedge amount was in excess of the call option amount," said a Tokyo-based trader. "It was estimated $2,850 calls should be exercised but in fact the market went down to $2,800 and $2,850 was abandoned so that's why they don't need hedge positions anymore," the trader said.
Expectations that the holder of the nearly 10,000 contracts would try to ramp up prices ahead of the on Wednesday expiration had lifted aluminium to a six-month peak of $2,851. The most active February Shanghai aluminium futures contract closed the session slightly lower at 20,160 yuan a tonne compared with Wednesday's finish of 20,240 yuan. A firmer US currency on the back of upbeat US jobs growth data also weighed on sentiment, with gold extending losses to hit its lowest level in two weeks on Thursday.