COPPER has closed at its lowest level in more than two weeks on the London Metal Exchange (LME), weighed by persistent worries over Chinese metals demand and improved supply of the copper to the market.
At the PM kerb close on Tuesday, LME three-month copper was down 1.5 per cent at $US6,729 a metric ton, its lowest settlement since June 24.
Aluminum ended the session 0.7 per cent lower at $US1,790 a ton.
Chinese economic data failed to impress base metal investors on Tuesday. While Chinese consumer prices rose 2.7 per cent on the year in June, the country's producer price index fell 2.7 per cent.
The fall in China's PPI is "another indication of faltering demand at the factory level amid excess capacity" in China, said INTL FCStone analyst Edward Meir.
China consumes about 40 per cent of the world's copper, which is used in everything from smartphones to plumbing. As such, manufacturing activity in the country is closely watched for copper demand signals.
Attention now turns to the release of China's June trade data on Wednesday. Chinese demand for industrial metals has been slow to ramp up this year. While imports of refined copper rose to about 232,000 tons in May, up 27 per cent on the month, this was still down 23 per cent on the year.
Wednesday's data could have "a significant bearing" on what direction base metal prices take next, said Standard Bank analyst Leon Westgate.
Copper investors were also digesting news that more supply of the metal headed for the physical market on Tuesday. Rio Tinto on Tuesday began exporting copper from its $US6.2 billion Oyu Tolgoi mine in Mongolia, while PT Freeport Indonesia's president director said underground mining at the company's operations in Papua has resumed almost two months after a fatal tunnel collapse.
Concerns over restricted supply of the metal to the market have lent support to copper prices in recent months.
