LONDON: Industrial metals slipped around 1 percent on Wednesday, as lingering euro zone debt concern weighed on the market, while investors worried that top metals consumer China may take further steps to cool growth.
"The debt worries are still playing a role, there is a lot of panic still in the market," said Peter Fertig, consultant at Quantitative Commodity Research. "There is a lot of very negative sentiment by a lot of commentators." "This negative sentiment, especially in Asia, is increasing pressure on the euro and also on stock markets -- those are negative factors for sentiment and financial investors."
Also weighing on base metals are persistent fears over efforts by China, the world's number one metals consumer, to stop its economy from overheating. Buying from China, helped copper prices gain 140 percent last year. China's April consumer inflation rose a little more than expected to 2.8 percent, data on Tuesday showed, but a bigger worry may be the rise in property prices that analysts said was the largest since records began about five years ago.
"This is another fear in the market -- China is trying to prevent the economy from overheating," added Fertig. "Taking the foot from the gas pedal doesn't mean that one is stepping on the brakes." Three-month copper on the London Metal Exchange was at $6,989 a tonne by 0745 GMT compared with Tuesday's close of $7,050 per tonne, while aluminium was $20 lower at $2,085.
Miners in the world's top copper producer, Chile, risk a slew of subcontractor protests that could curb global supply if they don't move quickly to boost benefits and pay for part-time workers. Technicals suggests that Copper support at $6,885, resistance $7,135, and 14-day RSI at 30.0. Aluminium support at $2,050, resistance at $2,155, and 14-day RSI 32.9.
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