Copper slipped on Monday in thin trading as signs that the property market was cooling in top metals consumer China worsened the outlook for industrial metals demand and weighed on market sentiment. Three-month copper closed at $7,260 a tonne, down more than 1 percent from a close at $7,345 a tonne on Friday. Traders said business was being pared back ahead of the end of the year.
Prices have shed one quarter of their value since the start of the year and have so far dropped by almost 8 percent this month as a deepening eurozone debt crisis has pushed investors to liquidate assets such as industrial metals. Signs of slower growth in China, the world's second-largest economy, raised further concerns over slowing metals demand growth.
"Most of the big funds we saw were far more nervous about the outlook for China rather than Europe. Europe, to a certain extent, is already in the prices," said David Wilson, director of metals research and strategy at Citi. "There's data coming out of China that is creating a little bit of cooling. As well as the Chinese property data, Chinese premiums seem to have slipped very sharply over the last week, and despite prices being lower last week there hasn't been much Chinese buying to be seen." China's November housing inflation hit its lowest level this year in a victory for Beijing's campaign to ward off property bubbles as it steadily eases monetary policy to aim for a soft landing in the world's second-largest economy.
The falling home price, in tandem with a sharp easing of China's consumer inflation in November from July's three-year peak, enables Beijing to tilt its policies more towards safeguarding economic growth and away from its top priority of calming inflation just a few months ago.
LME stocks data on Monday showed a large drawdown of 8,475 tonnes from warehouses in the South Korean port of Gwangyang, a key departure point for shipments to China. Meanwhile, supply constraints continued also to underpin prices. Striking workers at Freeport McMoRan Copper & Gold Inc's giant Indonesian mine on Saturday delayed until next week a plan to go back to work after a three-month strike because of technical issues, a union spokesman said.
Elsewhere, aluminium stocks held in warehouses monitored by the LME hit a record high of 4.87 million tonnes, LME data showed, as the eurozone debt crisis blunts demand as industry destocks ahead of year-end. LME aluminium closed at $1,962 a tonne, down from $2,005 on Friday. Prices hit their lowest since July 2010 last week at $1,955.75 a tonne. Across other metals, zinc closed at $1,838 from $1,868 and lead at $1,937 from $1,960. Nickel ended at $18,380 from $18,550, and tin at $18,695 from $18,800. Following the breakdown of a self-imposed tin export ban, political infighting has broken out in the Indonesia Tin Association, a smelter organisation established to create a unified front for producers.