Copper edged down on Monday as more negative news flow on Europe's debt crisis dimmed prospects for metal demand and overshadowed signs of improved growth in the United States, the world's largest economy.
German magazine Der Spiegel reported on Saturday the International Monetary Fund was losing confidence in Greece's ability to clean up its public finances and work off its mountain of debt.
The news came as German Chancellor Angela Merkel and French President Nicolas Sarkozy are due to meet later this session to
finalise details of a deal to increase fiscal coordination in the euro zone.
Three-month copper on the London Metal Exchange edged down 0.40 percent to $7,550 a tonne by 12:05 SA time. The metal, used in power and construction, lost 21 percent of its value last year - the first drop in two years.
“As much as US numbers are improving there is nothing positive coming out of Europe,” said VTB Capital analyst Andrey Kryuchenkov.
He added: “The crisis in Europe is affecting exports in China and for the Chinese to start restocking we need to see price pullbacks.”
Copper ticked up on Friday after data showed US employment growth accelerated last month and the jobless rate dropped to a near three-year low, the strongest evidence yet the economic recovery is gaining steam.
THE PLUS-SIDE
Investors are now awaiting trade data from China, due on Tuesday, in order to gauge whether the world's largest consumer of the metal is continuing to import more metal on a monthly basis.
“Given the fact that prices in China have held up better than elsewhere, traders have the incentive to import more metal into China,” said Credit Suisse in a note.
“Rising metals imports would be positive for prices, in our view. However, we would not become overly optimistic just yet.
European politics could still trigger erratic price moves this week.”
A busy week of government bond issues is planned in Europe featuring triple-A issuers Germany, Netherlands and Austria, and capped by sales of new debt by Spain and Italy on Thursday and Friday.
The debt auction are expected to total more than 21 billion euros.
On the plus side for copper, latest data from the Commodities Futures Trading Commission showed speculators further reduced bearish bets in the red metal to the lowest level since the second week of November.
Also, data from China over the weekend showed banks increasing their lending in the final month of 2011, raising expectations that businesses will find it easier to borrow and purchase commodities.
In other metals traded, soldering metal tin rose 0.50 percent to $19,950 a tonne while zinc, used in galvanising rose 0.62 percent to $1,864.50.
Battery material lead rose 0.31 percent to $1,965, aluminium fell 0.19 percent to $2,065 while stainless-steel ingredient nickel rose 0.17 percent to $18,731. - Reuters