Shanghai copper fell on Friday, disappointed after London failed to sustain gains as concerns swelled again that the US economy was ailing and demand could falter.
A nascent rally on Thursday was snuffed out by comments by Federal Reserve Chairman Ben Bernanke to US lawmakers that additional monetary policy easing may be needed and that the economic outlook had worsened.
But markets could take comfort after President George W. Bush said he wanted tax rebates for families and breaks for businesses in a rescue plan that could pump up to $150 billion into the economy.
"But the bigger question in people's minds is whether the Chinese economy can carry on if the United States softens. If it can continue, it would make developments in the US less relevant, especially if India also continues to grow."
The April copper contract the most active on the Shanghai Futures Exchange, closed 400 yuan lower at 59,900 yuan ($8,264) a tonne. Spot copper in Shanghai rose 625 yuan to between 62,450 and 62,750 yuan. Copper for delivery in three months on the London Metal Exchange rose $60 to $7,060 at 0721 GMT, having touched $7,180 on Thursday before Bernanke's testimony.
"There was some disappointment in the Chinese market that London couldn't sustain the gains it made during Asian trading on Thursday," a dealer in Shanghai said. Copper markets are tightening up. LME stocks fell by 5,500 tonnes or 2.9 percent overnight to 185,550, the lowest since November 21, and a further 23,550 tonnes have been earmarked for delivery in the near future.
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