SHANGHAI (Dow Jones)--Copper edged lower on the Shanghai Futures Exchange Thursday, as an impasse on negotiations to raise the U.S. borrowing limit and fears of debt contagion in Europe outweighed supply worries caused by a force majeure at the world's largest copper mine. Benchmark SHFE October copper settled 0.2% higher at CNY72,710 a metric ton. Without meaningful progress in negotiations between U.S. Republicans and Democrats over raising the debt ceiling, investors remained on the sidelines, keeping the red metal trapped in a tight CNY72,380/ton-CNY73,010/ton band. The range trade came despite a potential supply disruption from BHP Billiton Ltd.'s (BHP) Escondida mine in Chile, the world's largest copper mine. Weak U.S. manufacturing data overnight also weighed on copper as the red metal is sensitive to economic data due to its use in infrastructure, mass transit and housing construction, analysts said. Orders by manufacturers in the U.S. for durable goods fell 2.1% in June, compared with analyst expectations for a 0.4% rise. Still, analysts said the U.S. debt talks will remain in the spotlight over the next few sessions, and many have become increasingly concerned that a fallout of agreeing to raise the debt ceiling by the Aug. 2 deadline could lead to a downgrade of the triple-A credit rating of the world's largest economy and may have a significant impact on global markets. Copper traded at the Changjiang Nonferrous Metals Trading Market, a major spot metals market in Shanghai, was quoted at CNY71,850-CNY71,950/ton, tad down from CNY71,900/ton-CNY72,050/ton Wednesday. Three-month London Metal Exchange copper ended Wednesday's afternoon kerb $40 lower at $9,779/ton. It was quoted 0.2% higher at $9,795/ton around 0700 GMT, when the SHFE closed. "Metals are vulnerable to a pullback in the near term as their previous gains were built on a weaker dollar, not solid fundamentals," Everbright Securities Futures analyst Xu Yongqi said. Aluminum once again eclipsed other metals, rising for a fourth consecutive session, as fund buying continued on expectations of a steady rise in prices going forward due to slowing supply growth and persistent declines in stocks at exchange and non-exchange warehouses, traders said. SHFE aluminum settled 1.3% higher, lead lost 0.5% and zinc settled marginally down. Thursday's settlement prices in yuan a ton and LME late kerb prices from Wednesday in dollars a ton: SHFE LME Copper Oct 72,710 Dn 120 3Mo 9,779 Dn 40 Aluminum Oct 18,455 Up 245 3Mo 2,644 Dn 5 Zinc Oct 18,985 Dn 25 3Mo 2,522 Dn 9 Lead Sep 17,645 Dn 95 3Mo 2,690 Dn 30 -Yue Li contributed to this article; Dow Jones Newswires; (8621) 6120 1200; yue.li@dowjones.com

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