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Metals Experience Losses

London copper prices pared losses on Monday and Shanghai futures recovered from a four-year low

London copper prices pared losses on Monday and Shanghai futures recovered from a four-year low.

By 0517 GMT, London Metal Exchange copper for delivery in three months pared early losses of around 3 percent, to trade at $3,502 a tonne, versus $3,540 at Friday's close, moving away from Friday's more than three year low of $3,375.

Shanghai's benchmark third-month copper contract fell 0.8 percent, or 210 yuan, to 26,740 yuan a tonne, off an early four-year low of 26,520 yuan

But traders remained worried about downside risk and slowing demand for industrial raw materials.

Speculative sentiment appeared weighted to the downside as the non-commercial category boosted their net short positions to 16,244 on copper futures traded on COMEX in the week ending November 18, from 15,409 long lots at November 11, Commodity Futures Trading Commission data showed on Friday.

"There is no doubt that market sentiment is still weak," said a London Metal Exchange dealer based in Shanghai, noting investors were still more pre-occupied with bearish news, especially related to demand.

Apparent Chinese copper demand rose 4.2 percent in the year to October according to Reuters calculations, despite a 14 percent slowdown in imports year-to-date.

Demand in the world's top consumer of copper rose 4,245 tonnes in October to 422,923 tonnes from the previous month, but on an annualised basis, taking into account October's 31 days, demand on an annualised basis fell 2.2 percent.

Imports rose 15 percent in October and Shanghai copper stocks fell, but that was offset by a 7 percent fall in production in October from the previous month as smelters slowed output in the face of steep falls in prices.

Falling prices also resulted in a 4.7 percent cut in aluminium production, creating a 5 percent fall in apparent demand month-on-month. In the first 10 months of the year apparent demand is up 11.4 percent at more than 11 million tonnes.

Shanghai aluminium fell 75 yuan to 13,185 yuan, after touching its weakest since August 2002 on Friday. LME aluminium rose $18 to $1,770.

China's aluminium exports dropped 28.7 percent on the month, despite high stocks in the domestic market and weak domestic demand.

"The October net aluminium exports from China fell to a its lowest level since February 2008 ... and we believe China could have given a positive impact to the global market in the past several months," analysts at Orient Securities Futures said in a note.

Author: Jo Amey