Shanghai Futures Exchange copper dropped by 1.2 percent to 35,620 yuan ($5,513) a tonne on Tuesday ahead of the Federal Reserve's crucial policy meeting this week, however, hopes for demand growth in top consumer China put a floor under prices. Prices have been trapped in range as traders cut risk ahead of the Fed meet; but a bearish trend may resume early next year given the lack of a strong revival in drivers for demand, Standard Chartered said in a note.
"We continue to believe that at least the January-February period next year will be characterised by bearish investor sentiment, with downward pressure dominating price dynamics." Global and Chinese mines are cutting output due to the low prices. China's top integrated copper producer Jiangxi Copper and Chilean miner Antofagasta Minerals have agreed 2016 treatment and refining charges 9 percent lower than this year's fees.
"It is a bit disappointing that better vehicle and fixed asset investment data from China did not give the market more of a boost, suggesting more consolidation will be the order of the day, at least until Wednesday's US interest rate decision," Triland said in a note.