* China demand outlook dim after poor data at the weekend
* Central banks could start tightening monetary policy
* Worries over supply outages in copper limit losses
By Maytaal Angel and Harpreet Bhal
LONDON, June 11 Copper hit its lowest in more
than a month on Tuesday, pressured by worries that central banks
could soon start scaling back on stimulus measures and concerns
about the outlook for demand from top consumer China.
Three-month copper on the London Metal Exchange
ended at $7,065, down from a close of $7,230 on Monday.
It earlier touched its lowest since early May at $7,032 a
tonne in intraday trade.
Other metals also fell sharply, with nickel dropping
to its lowest level since July 2009 in intraday trade at $14,475
Copper's fall echoed other markets, as concerns over China
added to worries that central banks could soon start tightening
the ultra-loose monetary policies that have fueled rapid gains
in asset prices this year.
World shares fell and yields on riskier European debt rose
on Tuesday after the Bank of Japan's decision not to follow up
its $1.4 trillion stimulus programme announced in April.
Also adding pressure to prices was data at the weekend from
China, the world's biggest consumer of copper, showed unexpected
weakness in May trade and domestic activity struggling to pick
"There's really no incentive for anybody to look to the buy
side at the moment. In the short term, the weak Chinese data was
clearly a negative," said Wiktor Bielski, an analyst at VTB
China is the world's top consumer of copper, making up
around 40 percent of global demand for the metal.
"The lack of a strong recovery in Chinese demand should
continue to weigh on copper prices, which we forecast to fall
below $6,000 per tonne next year," Capital Economics said in a
Keeping prices in check were concerns about the outlook for
supply of the metal used in power and construction.
Operations at the world's No. 2 copper mine in Indonesia,
run by Freeport McMoRan Copper and Gold Inc, have been
shut since an accident last month killed 28 workers.
Also India's top copper smelter is preparing to reopen,
potentially adding to a short-term squeeze on concentrate
supply. The smelter will only operate until the second week of
"A lot of the big production increases over the next few
years are now in jeopardy because of financial pressure on
miners, or environmental problems for example," said Matt
Fusarelli of Sydney-based consultancy AME Group.
More supply is expected to hit the market, however. Global
miner Rio Tinto plans to start exporting copper from
the $6.2-billion Oyu Tolgoi mine in Mongolia on Friday, marking
the opening of a mine that will eventually make up one-third of
the country's economy.
In other metals, three-month lead ended at $2,117
from $2,164 at the close on Monday, and zinc was at
$1,852 from $1,903.50.
Aluminium, untraded at the close, was bid at $1,887
from $1,940, and tin was at $20,525 from $21,050. Nickel
ended at $14,535 from $15,045 on Monday.