* LME copper stocks jump by another 6,450 tonnes
* Physical traders in Europe, Asia report modest demand rise
* GRAPHIC-2016 metal returns: link.reuters.com/cag37s
(Adds closing prices)
By Jan Harvey
LONDON, Sept 6 Copper edged down on Tuesday,
drifting back towards last week's two-month low as a rise in
inventories offset signs of a modest pick-up in buying.
Physical copper traders said demand was marginally
increasing as the summer lull came to an end, though volumes
remained muted. Inventories in London Metal Exchange warehouses
rose further though, keeping the market under pressure.
LME copper stocks jumped 6,450 tonnes to 334,975 tonnes, the
latest data showed, the highest in almost a year.
"Copper is still underperforming, and it's still the worst
performing metal this year," Citi analyst David Wilson said.
"The LME build is slightly concerning, though that does seem
to have been priced to a certain extent. We don't know how much
more there is to come."
Three-month copper on the London Metal Exchange
closed at $4,620 a tonne, down 0.1 percent, after ending the
previous day little changed. LME copper is holding just above
support at $4,600, a nine-week low touched last week.
Investment interest was lacklustre, with the total net long
position of funds trading copper on the London Metal Exchange
falling to 18,033 lots on Friday from 27,026 lots the previous
week, according to the LME's Commitments of Traders report.
That came after data from the U.S. Commodity Futures Trading
Commission showed on Friday that speculators sharply increased
their net short position in copper futures and options.
"In copper, the speculative community continued to increase
their net short position to largest levels since June 2016 with
prices losing ground over the week," Deutsche Bank said in a
But traders in Europe and Asia reported a marginal rise in
copper demand, which has been soft in recent months.
"Feedback from fabricators onshore points to a pick-up in
orders from the construction sector in recent weeks," Standard
Chartered said in a report.
Also potentially supporting copper prices, striking workers
at Codelco's small Salvador copper deposit in Chile have blocked
access to the mine and are affecting production, the company and
union said on Monday.
LME nickel closed up 0.4 percent at $10,110 a tonne,
while LME tin ended 0.3 percent higher at $19,450.
LME aluminium closed up 0.6 percent at $1,589 a
tonne, and LME lead ended 0.2 percent higher at
$1,946.50 a tonne. LME zinc closed down 1.8 percent at
$2,321 a tonne.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
(Additional reporting by Melanie Burton in Melbourne; editing
by David Clarke)