Copper Extends Fall in Price
Copper prices have fallen along with Chinese equities as economic data from China reinforces worries about demand growth in the world's top consumer of industrial metals.
Benchmark copper on the London Metal Exchange fell as much as 1.5 per cent to $US5,287 a tonne. The metal, used in power and construction ended down at $US5,310 from Friday's close at $US5,370.
Industrial output and fixed asset investment data for August came in below consensus, reviving concerns about China's economy and the possibility it could fail to achieve a 7.00 per cent growth target this year.
"You don't have to look far to find the culprit for this move, the perception of the China's growth hasn't improved," said Peter Ferig, founder of Quantitative Commodity Research.
However, Fertig said that China's economy was not as bad as the market thought it would be when the country's central bank devalued the yuan in August.
"There was some irrational behaviour over the summer," Fertig said.
In August, copper hit a six-year low of $US4,855 and Shanghai's composite stock index fell to near 2,850, it lowest since December.
News that China will work to reform and restructure public sector firms failed to help market sentiment, leaving Shanghai equities down 2.67 per cent on Monday.
"The key this week however will be the Fed's decision," ICBC Standard Bank said in a note.
"We don't think rates will be hiked in September. However, the risk and uncertainty will likely keep participants on the side-lines with a finger hovering over the sell button just in case."
Higher US rates would mean a stronger US currency, which when it rises makes dollar-denominated commodities more expensive for non-US-firms.
Three-month aluminium was lower at $US1,621 from $US1,639.5 on Friday.
"The imposition of LME warehouse reforms is central to the aluminium markets ability to reflect its fundamentals, not its distortions," Morgan Stanley said in a note.
"All price signals now properly reflect weakening fundamentals (i.e. surpluses). This, in turn, will prompt smelters to cut production more directly."
Zinc earlier hit a one-week low at $US1,750.50 and ended down 3.3 per cent at $US1,752 from $US1,812. Lead ended at $US1,675 from $US1,706 and nickel at $US9,920 from $US10,300.
Nickel earlier ceded 3.8 per cent to $US9,910. Weak demand from Chinese stainless steel mills is expected to cap any attempts to push up nickel prices.
Tin was untraded at the close, but bid up at $US15,550 from $US15,525. The soldering metal is supported by lower shipments from top exporter Indonesia this year and falling stocks in LME approved warehouses.