The most-traded August copper contract on the Shanghai Futures Exchange slipped 0.9 percent to 42,150 yuan ($6,791) a tonne on Tuesday as traders trimmed risk given worries that a Greek debt default could destabilise the euro zone and as the peak manufacturing season winds down. "The market is reassessing a little bit of the demand outlook - and then you have Greece on top," said Dominic Schnider of UBS Asset Management in Hong Kong.
Schnider said copper prices could revisit $5,500 short-term before stabilising and climbing later this year as supply falls and demand recovers. "We might have a little bit of a stabilisation if you look at some China indicators, but given all the monetary easing, the numbers are not good enough," added Schnider. Traders are watching a two-day Federal Reserve meeting starting Tuesday that could offer fresh clues on dollar direction. Higher rates may strengthen the dollar, which blunts the appeal of commodities for buyers using other currencies. Supply concerns continue to underpin copper price prospects later in the year. Union No 1 at Chile's Collahuasi copper mine said its workers had put down their tools for a 24-hour strike Monday morning, while the company said it had implemented a contingency plan to safeguard workers' security.