BR:London copper slips on jitters ahead of Fed tapering call
SINGAPORE: London copper ended six sessions of gains on Monday as traders cut risk ahead of this week's Federal Reserve decision on whether to trim stimulus that has supported commodities and a string of manufacturing reports later in the day.
Most metals have recovered 3-5 percent this month and given many are trading at or below cost of production they are poised to profit from improving prospects for economic growth, said analyst Mark Kennan of Societe Generale in Singapore.
"Participants have likely got over pessimistic on the sector.
From an investment perspective industrial metals will probably provide the greatest opportunity on the prospect of emerging nascent economic growth," he said.
Three-month copper on the London Metal Exchange had edged down 0.21 percent to $7,240 a tonne by 0210 GMT, from the previous session when it gained 0.5 percent.
LME copper hit $7,265.25 a tonne on Friday, the highest level since Nov. 1.
It has climbed 2.8 percent so far in December.
The most-traded February copper contract on the Shanghai Futures Exchange climbed 0.27 percent to 51,360 yuan ($8,500) a tonne.
US retail sales rose solidly in November, adding to signs of a strengthening economy that could draw the Fed closer to reducing the pace of monetary stimulus.
Flagging a brightening outlook for metals, Japanese manufacturing sentiment improved in the three months to December for a fourth straight quarter, the Bank of Japan's "tankan" survey showed, boding well for the government's stimulus policies aimed at beating 15 years of deflation.
China's leaders pledged to maintain stable economic policies to achieve reasonable economic growth in 2014 while forging ahead with reforms, as they wrapped up a closed-door meeting on Friday, state radio reported.
Hedge funds and money managers sharply trimmed net shorts in copper, by 18,093 contracts to 1,223, the smallest short position in five weeks, a report by the Commodity Futures Trading Commission showed on Friday.
Market participants will be watching for preliminary European manufacturing figures for signs of improving demand for metals, as well as the US December's industrial production report.
A shortage in physical supply has kept copper prices underpinned as global exchange stocks slump and copper users in China brace to pay higher premiums to procure metal next year.
