BASE METALS: Copper Slumps Below $4 As Economic Worries Weigh

Sep 12, 2011 NEW YORK (Dow Jones)--Copper futures fell Monday morning as fresh concerns about Europe's sovereign debt problems raised the specter of lower demand for the industrial metal.

The most actively traded contract, for December delivery, was recently down 5.9 cents, or 1.5%, at $3.9435 a pound on the Comex division of the New York Mercantile Exchange.

Thinly traded September-delivery copper was down 6.55 cents, or 1.6%, at $3.9220 a pound.

Greece again dominated market attention as fears of a default by the euro-zone member re-emerged Monday. Greece's government said Sunday it will impose a new property tax to cover a EUR2 billion shortfall in its budget this year.

Greece's troubles spilled into France, where expectations run high that credit rating firm Moody's Investors Service could downgrade French banks because of their Greek debt holdings.

Copper prices receded below the $4 mark on concerns that Europe's debt problems would slow global growth and dim demand for the metal. Copper is widely used in everything from laptops and air-conditioners to construction 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 (Codelco), have asked to cancel orders on concerns about low economic growth stocked these concerns.

"This reflects the uncertainty in the markets," Codelco's 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.

The Shanghai Futures Exchange, China's main hub of copper futures trading, is closed in observance of a public holiday Monday.