Copper Dips Near 4-1/2 year Low on China Growth Woes

Copper dipped back on Tuesday near to its lowest in 4-1/2 years on persistent concerns about a looming surplus and slowing growth in China, and as oil and equities fell.

Three-month copper on the London Metal Exchange traded down 0.32 percent in official midday rings at $6,270 a tonne, within sight of the 4-1/2 year low of $6,230 a tonne hit on Monday.

Investors sold commodity basket holdings after oil prices hit their lowest in 5-1/2 years. Worries about Greece's future in the euro zone and general risk aversion subdued global equities, seen by some as a proxy for economic growth.

"I will not be surprised to see prices go down to $6,000 a tonne," said one metals trader in Shanghai.

"The low price has more to do with people's expectations on how Chinese demand is going to be in the coming year. Obviously, no one has strong confidence and tightening of liquidity in China has been causing some concern."

The next reading on China's growth is due on Wednesday with the release of the HSBC manufacturing PMI. According to a Reuters poll the data will likely show growth in the sector slowed to an 18-month low in December.

Investors are hoping Chinese authorities will roll out more stimulus measures to support the economy. Still, a top Chinese government think tank said on Monday growth is expected to slow to 7 percent next year from a forecast 7.3 percent this year.

Also weighing on copper are signs of increased supplies. LME copper stocks are at 172,250 tonnes, having been on a rising trend since August when they fell as low as 140,675 tonnes. <MCU-STOCKS>

Offering the metal some support, cash copper on the LME has been trading at a premium to the three-month price since July <CMCU0-3>, indicating physical metal is still not easy to come by despite growing supplies.

Aluminum traded down 0.22 percent in rings at $1,855 a tonne, lead was last bid down 0.55 percent at $1,822 a tonne, while zinc traded up 0.42 percent at $2,151 a tonne.

Nickel was last bid down 0.83 percent in rings at $14,925 a tonne while tin traded down 1.30 percent at $19,000 a tonne.