Copper traded flat on Tuesday after supportive buying from China waned as the world's top metals consumer approaches a holiday period, while investors assessed the latest macro data from the United States. Copper for three-months delivery on the London Metal Exchange closed at $5,980 a tonne from a close of $6,009 on Monday, up from Tuesday's session low of $5,907 a tonne as mixed US data gave modest support.
The metal used in power and construction has almost doubled in 2009, largely thanks to vast buying exercises by the China State Reserves Bureau and new investor cash. But as Chinese imports drop, investors fear OECD demand may not recover from economic slowdown in time to pick up the slack.
"Since last week when we were holding quite well, what's changed?" said Robin Bhar, analyst at Calyon. "Clearly we had those August (Chinese import) numbers which pointed to weaker demand." Import data from China last week, showed that refined copper imports fell 25 percent in August. Latest data showed copper stocks dipped 125 tonnes to 344,225 tonnes, still close to their highest level since mid-May.
"There is still a distinct gap between the (macro) data and how it is reflecting real-world demand," said Calyon's Bhar. Copper is on track for a fall of nearly 9 percent in September, its first monthly loss since December 2008. Analysts warn of further price weakness ahead as week-long Chinese holidays start on October 1 and as the copper market enters the traditionally weak fourth quarter.
"The general feeling out there is we could see a bit more selling before we go into the Chinese holiday," said Gayle Berry, an analyst at Barclays Capital in London. Among other industrial metals, aluminium ended at $1,852 from $1,833.
Inventories of the metal used in transport and packaging fell 3,850 tonnes but are still within touching distance of a record high around 4.6 million tonnes. Zinc ended at $1,883 from $1,878 and lead stood at $2,232 from $2,207. Tin was untraded in LME rings, but last bid at $14,400 from $14,400. Nickel closed at $17,145 from $16,750.