(Reuters) - Copper hit a one-month low on Monday on uncertainty over global demand and Beijing's next policy move, with traders sticking to safe plays ahead of data this week on third-quarter economic growth in China.
Recent numbers from China have clouded expectations on whether it will take more steps to shore up growth, with an easing of the country's annual consumer price inflation pointing to ample room for policy easing, but a strong rebound in September exports suggesting policy changes may not be needed for now.
Besides being wary over the health of the world's second largest economy, investors are eyeing third-quarter U.S. corporate results as they should give an idea of broader global demand for metals.
Three-month copper on the London Metal Exchange had nudged down 0.2 percent to $8,113.50 per tonne by 0717 GMT. It earlier dropped to a one-month low of $8,050, its lowest since September 13.
The most active January copper contract on the Shanghai Futures Exchange closed the session 0.7 percent lower at 58,550 yuan ($9,300) per tonne, paring losses after opening down 1.3 percent at a trough of 58,230 yuan, also its lowest since September 13.
"There is an air of uncertainty today ... which makes it hard to predict what (the Chinese government) will do next," said Andy Du, derivatives director at Orient Futures.
"Investors are divided in their opinions on copper's outlook, which will keep London copper see-sawing in small daily movements between $7,800 and $8,600. I doubt China GDP figures will offer a big enough surprise to decisively sway either bulls or bears."
Economists polled by Reuters indicated China's annual economic growth probably slowed for a seventh straight quarter in the July-September period to expand 7.4 percent, down from 7.6 percent in the second quarter and the weakest level since the depths of the global financial crisis.
While China's September copper shipments rebounded 11 percent from a month earlier, analysts said this was due to bookings made late last year and did not reflect a revival in underlying demand. Compared to a year ago, September imports were also up just 3.8 percent -- the slowest in 13 months.
GETTING PHYSICAL
In Chinese physical markets, traders said their spot sales were still hit by weak downstream demand.
"Our physical sales have been affected by consumers waiting for trading cues from this week's LME Week and GDP data, as well as the 18th Party Congress in November," said a Shanghai-based physical trader.
Metal industry participants often negotiate new contracts for the year at the LME Week event.
The Communist Party Congress on November 8 is China's most important political transition event, where the country's new leaders will be formally unveiled.
Economic data from the United States offered a rare bright spot, with consumer sentiment unexpectedly rising to its highest in five years in October. The U.S. government also posted a small budget surplus in the final month of the 2012 fiscal year.
The euro zone, however, remains mired in its financial crisis, with little progress on Greece and Spain's debt problems.
Germany insisted it was too soon to say Greece deserved more time to meet its deficit-cutting goals even as the head of the International Monetary Fund laid out the case for leniency, while it is still not clear if Spain will be accepting a bailout, despite assurances that preparations are in place for such a move.
Base metals prices at 0717 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8113.50 -16.50 -0.20 6.76
SHFE CU FUT JAN3 58550 -430 -0.73 5.25
LME Alum 1979.50 -14.50 -0.73 -2.00
SHFE AL FUT JAN3 15495 -25 -0.16 -2.18
HG COPPER DEC2 369.20 -1.10 -0.30 7.45
LME Zinc 1924.00 -11.00 -0.57 4.28
SHFE ZN FUT JAN3 15175 -100 -0.65 2.57
LME Nickel 17052.00 -23.00 -0.13 -8.86
LME Lead 2131.00 0.00 +0.00 4.72
SHFE PB FUT 15690 -130 -0.82 2.62
LME Tin 21100.00 -215.00 -1.01 9.90
LME/Shanghai arb 914
Shanghai and COMEX contracts show most active months
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
