RTRS:Copper falls, market nervous ahead of Jackson Hole
(Reuters) - Copper fell to its lowest in a week on Wednesday on lingering worries about weak growth in top metals consumer China, while investors were nervous ahead of a key meeting of central bankers at Jackson Hole.
Benchmark copper on the London Metal Exchange traded at $7,555 a tonne by 0945 GMT, more than 1 percent down from a last bid of $7,640 on Tuesday. Earlier, the metal used in power and construction fell to a session low of $7,531, its lowest in more than a week.
Soldering metal tin fell more steeply, by as much as 5 percent, interrupting a recent rally after Indonesian tin producer PT Timah (TINS.JK) announced it had re-started spot sales after a three-week stoppage, easing shortage worries.
With the exception of tin, trading volumes for metals were thin as investors were cautious ahead of an upcoming meeting of central bankers at Jackson Hole, Wyoming, which could offer clearer cues as to whether the United States Federal Reserve will launch new stimulus measure.
New economic stimulus could boost demand for base metals which has been disappointing so far this year, especially in top buyer China, which consumes about 40 percent of global production.
"It is still a pretty ugly picture: the Chinese are still struggling with how their economy is faring given the downturn in Europe and elsewhere," said Standard Bank analyst Leon Westgate.
"Weaker Asian markets are also weighing on metals and thin trading volumes ahead of Jackson Hole are a feature of the market this week. As a house, we are assuming there is going to be some sort of easing but the question is what form that takes, whether it's quantitative easing or some other mechanism."
The Shanghai stock market .SSEC logged its lowest close since February 2009, said CIFCO Futures analyst Zhou Jie.
TIN PLUNGE
The announcement that PT Timah had re-started spot tin knocked tin prices, which fell as low as $19,901 a tonne, before recovering to trade at $20,200 from a close of $20,900 on Tuesday.
Prices had shot up 13 percent last week on news that over 90 percent of Indonesian tin miners have stopped production.
"Tin went into technical resistance, so it was running out of momentum, however PT Timah's announcement that it has restarted spot sales certainly sparked a bit of a sell off and it is effectively capping the price at the moment," Westgate said.
In other metals, zinc, used to galvanize steel, was at $1,858.75 from $1,879 at Tuesday's close, while battery material lead was at $1,964 from $1,971.
Aluminium was at $1,901.50 from $1,919.
Buyers should expect further rises in aluminium premiums, Commerzbank said. "Premiums on aluminium are set to increase once again in the fourth quarter in Japan, Asia's largest importer of aluminium," the bank said in a research note.
"The sharp increase is partly blamed on higher premiums in other regions - especially in Europe and the U.S., and partly on a reduced availability of aluminium."
Aluminium availability has been falling in the last few months as lower prices against rising costs forced some major producers to cut their output.
