Sep 12, 2011 NEW YORK (Dow Jones)--Copper prices receded Monday as fresh worries about Greece's ability to pay its bills and fears of weaker demand for the metal curb investor appetite.
The most actively traded contract, for December delivery, settled 3.70 cents, or 0.9%, lower at $3.9655 a pound on the Comex division of the New York Mercantile Exchange. The contract touched a low of $3.9050 a pound, the lowest price since August 11.
Thinly traded September-delivery copper fell 3.70 cents, or 0.9%, to settle at $3.9505 a pound. The contract traded at a low of $3.8940, the lowest price since August 11
Copper for three-month delivery on the London Metal Exchange fell 0.8% to finish the afternoon open outcry session at $8,754.50 a metric ton.
Meanwhile, the Shanghai Futures Exchange, China's main hub for copper futures trading, is closed in observance of a public holiday Monday. China is the world's largest consumer of the red metal, and accounts for around 35% of global demand.
"It's worth remembering that China [is] the swing consumer and, [if] they come in as buyers [Tuesday], the picture may not be as dire as was painted this morning," said traders at RBC Capital Markets.
Traders on both sides of the Atlantic were wary of expanding their copper holdings due to fresh talk of a Greek default and expectations that French banks may face a credit downgrade later this week.
Copper, as with other commodities, is considered a riskier asset which can bring greater losses as well as profits, and demand for such investments tends to wane when economic fears run high.
Investors are also concerned that Europe's ongoing government debt crisis will dent industrial demand for the metal. Copper is widely used in everything from headphones and cars to household plumbing and demand for such products declines when economic activity slows.
A report that U.S. and European clients of the world's largest copper-mining company, Chilean state-owned Corporacion Nacional del Cobre de Chile, or Codelco, have asked to cancel orders on concerns about low economic growth stoked these concerns.
"This reflects the uncertainty in the markets," Codelco Vice President of Marketing Rodrigo Toro told El Mercurio daily paper.
Codelco is negotiating with its clients about the requests and declined to comment on the matter to Dow Jones.
A robust improvement in China's August copper imports did little to boost prices. China imported 340,398 metric tons of copper and copper products in August, up 11% from July but down 10% from August 2010, data from the General Administration of Customs showed Saturday.
"This is the second highest figure this year and marks the third consecutive monthly rise. The growth of copper imports has therefore noticeably accelerated again," said analysts at Commerzbank.
Copper settlements (ranges include electronic and pit trading):
SEP $3.9505; down 3.70 cents; Range $3.8940-$3.9655
DEC $3.9655; down 3.70 cents; Range $3.9050-$3.9960