SINGAPORE: London copper turned negative on Tuesday as support began to fade from an orderly auction of Greek default insurance that boosted the euro, while bleak demand expectations from Chinese copper consumers discouraged buys. Three-month copper on the London Metal Exchange fell 0.44 percent to $8,532.25 per tonne by 0529 GMT, having taken aim at $8,600 earlier in the session. Copper hit its highest in two weeks at $8,690 on Friday and is up more than 12 percent this year, but prices have struggled to gain traction above this level. The most-traded June copper contract on the Shanghai Futures Exchange eased 0.10 percent to 60,240 yuan ($9,500) per tonne. Demand from top consumer China remained slack, with little hope for solid improvement from Chinese consumers given that demand from their export markets is still soft, Standard Chartered metals analyst Judy Zhu said. "In the last week copper prices have stabilized around $8,500 a tonne, but it's really moving nowhere and facing strong overhead resistance," she said. "Demand is starting to recover from last months' previously low levels but consumers don't expect any strong recovery this year - that's the problem," she said. China accounts for 40 percent of global refined demand. Consumers are keeping low inventories and are reluctant to purchase any more material than they need immediately because of expectations prices will stay low and the high cost of financing material in China, where access to credit remains cramped. Reflecting an absence of near-term purchases, the negative price differential between London and Shanghai copper hit a 14-month low near $450 on Tuesday. Front-month Shanghai copper remains at a 400-yuan discount to third-month prices, having been at a premium late last year. Still, China's arrivals of refined copper may rise this month after February's higher than expected figure, as importers scheduled more term shipments under 2012 contracts, traders said, and as metal is used for financing purposes. The February breakdown will be released on March 21. Lending some support to prices, the dollar fell as easing fears about the threat posed to the euro zone by Greece diminished the U.S. currency's safe-haven appeal. Asian shares crept higher following a rally on Wall Street. Markets will be watching closely for U.S. housing figures later in the session, after poor figures for China's housing market on Monday flustered investors, Credit Suisse Private Banking said in a note. "Market participants expect a moderate pick-up of activity from very low levels. This would be positive news for metals, as housing accounts for a sizeable share of metals demand," it said. In metals news, Swiss commodities giant Glencore International will resume operations at the only copper refinery in the Philippines by June or July, six months after a fire halted its operations, a company official told Reuters on Tuesday. Also, Australia's parliament passed laws for a new 30 percent tax on iron ore and coal mine profits on Monday after a bruising two-year battle with mining companies, a major victory for Prime Minister Julia Gillard and her struggling minority government.

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