Copper slips after China imports drop

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    LONDON - Copper prices dipped, as investors fretted about signs of faltering demand from major consumer China.

    Copper for three-months delivery on the London Metal Exchange traded at $US6,208 a tonne at 0938 GMT from a close of $US6,270 on Tuesday.

    Buying by the world's top copper consumer has helped prices of the metal used in power and construction more than double so far this year as the global slowdown stifled OECD demand.

    China's imports of refined copper in August fell by one-quarter versus the month before, as expected, a second consecutive monthly decline as rising domestic stocks and weak prices brought a halt to record buying.

    "The market is worrying that stronger OECD demand won't come in time to offset the slowdown in Chinese imports," said Barclays Capital analyst Gayle Berry.

    "We'll see Chinese imports continue to fall over the next couple of months. The State Reserves Bureau is not buying and consumers have restocked in China now. That's a finite process and it's pretty much run its course."

    Worries about falling Chinese imports eclipsed a weaker dollar, which hovered near a one-year low against a currency basket. A weaker US currency is usually supportive for industrial metals as it makes dollar-priced material cheaper for holders of other currencies.

    Stocks rise

    Stocks of copper at LME warehouses rose 175 tonnes to 331,950 tonnes. Inventories have been trending higher since early July, reversing a trend of nearly constant falls earlier in the year,

    Highlighting concerns about rising inventories, China may hold nearly 1.2 million tonnes of refined copper stocks, about 80 days of consumption, an analyst at a state-backed research group estimated.

    Aluminium , used in transport and packaging, was at $US1,870 from $US1,889. Stocks of aluminium at LME warehouses dropped 4,250 tonnes but stood just below a record high above 4.6 million tonnes.

    Zinc was at $US1,918 from $US1,946 and battery material lead was at $US2,250 from $US2,289.

    Tin was at $US14,650 from $US14,650. The backwardation on the metal - a premium for cash material over three-month delivery - shot up to $US720/740, versus $US260 on Sept.17.

    A dominant position holding more than 90 percent of tin at LME warehouses, according to latest data, is helping to boost the backwardation.

    "There is this significant position holder that has been carrying positions as high as 90 percent of the warrant holdings," said Alex Heath, head of base metals at RBC Capital Markets.

    "When you have a situation like this in a market that is illiquid, one large player does stand out."

    Nickel was at $US17,950 from $US17,750.;src=rss

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