Copper dropped in London on speculation that demand from China may weaken as economic growth slows in the biggest metals user.
Copper stockpiles in Shanghai rose for the first time in five weeks, local exchange data showed last week. Copper also declined on concern that Europe's debt crisis will persist even after leaders agreed to a fiscal accord. Prices fell as the dollar strengthened, making metals priced in the currency more expensive in terms of other monies.
"It's dawning on the market over the last month or so that China is slowing down more and Asia as well," William Adams, head of research at basemetals.com, said by phone yesterday. "That all warrants a continuation of the downtrends we've seen in the base metals."
Copper for three-month delivery fell 2.5 per cent to $7,620.75 (Dh27,983) a ton by 10.02am on the London Metal Exchange. The metal declined 1 per cent last week. Copper for March delivery decreased 2.6 per cent to $3.4645 a pound on the Comex in New York.
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Few new measures
European leaders unveiled a blueprint last week for a fiscal accord to save the region's currency, adding €200 billion (Dh982.66 billion) to a bailout fund and tightening rules to curb future debts. Last week's European Union summit offered few new measures and doesn't diminish the risk of credit-ranking revisions, Moody's Investors Service said.
"There's been a lot of build-up this summit would get to grips with the situation," Adams said. "But they actually produced less than the market expected, and therefore we're getting a bit of a negative reaction to that."
The euro fell 0.9 per cent against the dollar before a German report today that economists say will show investor confidence in the region's largest economy slid to a three-year low.
China's industrial production grew 12.4 per cent in November from a year earlier, the slowest pace since August 2009. Copper stockpiles jumped 26 per cent last week to 72,712 tons from a 28-month low of 57,655 tons a week earlier, data from the Shanghai Futures Exchange showed December 9.
Copper stockpiles monitored by the LME fell for a fourth day, declining 500 tons to 385,575 tons, exchange data showed yesterday. Orders to draw the metal from LME warehouses rose 0.1 per cent to 22,925 tons.