Copper futures prices in Shanghai slipped more than 1 percent on Tuesday, shrugging off China's smaller-than-anticipated interest rate cut, as investors fretted over the global demand outlook. China trimmed interest rates on Monday in a latest step to fend off a deepening economic slowdown, but the cut, the fifth since mid-September, was smaller than many analysts had expected.
"The timing was ahead of a market forecast, but the size was much smaller than expected. There could be more room for the central bank to cut rate further next year, but nowadays weak copper consumption dominates the market sentiment," said analyst Cai Luoyi at China International Futures.
The People's Bank of China cut benchmark one-year lending and deposit rates by 27 basis points, a far cry from its last move slashing rates by 1.08 percentage points and after the country said, its factory output expanded just 5.4 percent in the year to November, the weakest pace for a non-holiday month on record. The key Shanghai futures contract fell 1.3 percent, or 300 yuan, to 23,050 yuan ($3,364) by 0308 GMT, giving up its gains after hitting an upside limit in the previous session.