SYDNEY: London copper fell on Thursday to its lowest in 12 weeks as traders shed riskier assets on renewed worries of turmoil in emerging markets, fed by escalating tensions in Ukraine. London copper prices have been trapped in a $7,000-$7,220-a- tonne range for most of February while in Shanghai, prices have hit the lowest in more than six months. Sentiment is souring as traders, impatient for signs that the industry is ramping up after the Lunar New Year, are facing slowly filling order books, while falling property prices in China have dented the appeal of copper imports for financiers. But orders may yet pick up as March gets underway for the seasonally strongest second quarter of demand, suggesting prices may not fall too far from here, said Sijin Cheng, analyst at Barclays in Singapore. "We probably need to see a relentless increase in China's bonded stocks or even Chinese exports for prices to really come off. Copper is going to be caught in between the different forces for the time being," she said. Three-month copper on the London Metal Exchange fell to $6,994 a tonne, its weakest since Dec. 4, before paring losses to trade at $7,010 a tonne by 0316 GMT. The most-traded May copper contract on the Shanghai Futures Exchange fell to 48,980 yuan ($8,000) a tonne, its lowest in nearly seven months. Russian President Vladimir Putin ordered drills by his armed forces to test combat readiness in western Russia, near the border with Ukraine, prompting Washington to warn a military intervention would be a "grave mistake." Falling Chinese property prices have dented the allure of copper imports. Financiers typically import copper to resell on the domestic market for credit, often when credit is tight, to fund investments in higher yielding assets such as property. In an early sign that a slowdown in property prices that spooked investors this week may be spreading, Chinese property developers are stepping up the use of sales promotions for some suburban housing projects. Also rattling investors, China's central bank this week engineered a sudden fall in the yuan against the dollar, but economists warned that induced downside risk was no substitute for true liberalisation in the currency market. In the United States, even though sales of new US single-family homes surged to a 5-1/2-year high in January, economists said the bounce was likely to be short-lived amid signs of broader weakness in the housing market. Lending some support to prices has been a severe shortage of physical copper in markets outside of China. LME cash-copper prices traded at a $78.50 premium over the benchmark contract on Wednesday, the loftiest in almost two years. LME stockpiles are sitting at 14-month lows as traders shipped near record volumes of copper into the top user of metals in January, anticipating a pick up in demand and after a December cash crunch in China fuelled huge appetite for imports.

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