LONDON, Oct 13 (Reuters) - Copper prices turned lower on Tuesday as concerns about the pace of economic recovery returned, with the market still short of evidence of improved metals demand.
Copper for three-month delivery MCU3 on the London Metal Exchange fell more than 3 percent to $6,110 a tonne at 1352 GMT from $6,275 at the close on Monday.
Highlighting weak demand, LME inventories for copper, used in power and construction, rose 575 tonnes to remain near five-months highs at 347,950 tonnes.
"Basically the market is waiting for signs of an improvement in the real economy and it's the timing of that recovery that is uncertain," said Standard Bank analyst Leon Westgate.
Copper prices rose almost 6 percent last week as traders eagerly anticipated the return of China, the world's largest metals consumer, from a week of holidays.
"Last week everyone was afraid that the Chinese would be buying heavily after coming back from Golden Week and everyone was afraid to have short positions," said Eugen Weinberg, an analyst at Commerzbank.
"But this week that seems to be changing in advance of import data from China which could be a negative surprise."
China will announce September copper imports on Wednesday, which are expected to have fallen for a third consecutive month, after record imports in the first half of the year. nFLLCMM2UZ
"That would be a real blow to the bulls as the story of China buying at any price might be blown up," Weinberg added.
In industry news, BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research) halted extraction at its Spence copper mine in Chile after workers went on strike, but analysts said the mine is fairly small so the strike is not likely to impact prices much. [ID:nN13171656]
Also, with worker's at Escondida in Chile having accepted an early wage offer from BHP Billiton, the impact of the Spence strike was further muted. Escondida is the world's biggest copper mine. [ID:nN13176456]
RUNNING AHEAD
Chinese stockpiling, improving macro data and new investor cash have helped copper prices to roughly double this year.
But with the stockpiling slowing and persistent doubts over the pace of a global recovery, industry executives gathering at the annual London Metal Exchange week, have spoken about prices running ahead of fundamentals. [ID:nL8107826]
Rio Tinto (RIO.L: Quote, Profile, Research) (RIO.AX: Quote, Profile, Research) said on Tuesday it saw some downside risk to copper prices over the next 12 months, adding it expected Chinese copper imports to slow. [ID:nLD662996]
The miner remained upbeat about the price in the longer term, however, due to expected supply problems.
In other metals traded, aluminium MAL3 fell to $1,896.50 a tonne from $1,947 after hitting a day low of $1,865, down more than 4 percent.
Inventories for the metal, used in transport and packaging, slipped 2,425 tonnes to remain near record highs close to 4.6 million tonnes.
"High inventories and high prices are keeping buyers in a holding pattern currently," said investment bank Fairfax in a note.
Steel making ingredient nickel MNI3 fell more than 3 percent to $18,240 from $18,820 while battery material lead MPB3 dropped to $2,258 from $2,294.
Zinc MZN3 was at $2,025 a tonne from $2,094, having fallen nearly 4.5 percent to a day low of $2,000, while tin MSN3 was at $14,250 from $14,675, having hit a one week low of $14,250.
Investors in tin, used in electrical solder, remained concerned about supplies because of a dominant position controlling more than 90 percent of cash warrants on LME stocks. [ID:nL9551738]
Metal Prices at 1356 GMT Metal Last Change Pct Move End 2008 Ytd Pct
move COMEX Cu 276.50 -8.30 -2.91 139.50 98.21 LME Alum 1891.00 -56.00 -2.88 1535.00 23.19 LME Cu 6085.00 -190.00 -3.03 3060.00 98.86 LME Lead 2255.00 6.00 +0.27 999.00 125.73 LME Nickel 18175.00 -575.00 -3.07 11700.00 55.34 LME Tin 14300.00 -375.00 -2.56 10700.00 33.64 LME Zinc 2020.00 -74.00 -3.53 1208.00 67.22 SHFE Alu 14925.00 30.00 +0.20 11540.00 29.33 SHFE Cu* 48980.00 -120.00 -0.24 23840.00 105.45 SHFE Zin 15830.00 20.00 +0.13 10120.00 56.42 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Additional reporting by Veronica Brown and Maytaal Angel; editing by Sue Thomas)
