DJ BASE METALS: Copper 3.3898 Eases in Thin Trading After Friday's Rally

Aug 06, 2012 By Matt Day

--Comex September copper trades down 1.6 cents, or 0.5%, at $3.3515 a pound

--Trading volume low after market's swings late last week

--Traders this week looking ahead to Chinese industrial production, inflation data

NEW YORK--Copper futures ticked lower on Monday in thin trading, as investors weighed the demand outlook for the industrial metal ahead of economic data expected later this week from top consumer China.

Copper for September delivery, the most actively traded contract, recently traded down 1.6 cents, or 0.5%, at $3.3515 a pound on the Comex division of the New York Mercantile Exchange.

"This week has started quietly, with the base metals hanging on around Friday's closing levels and catching [their] breath after the yo-yo end to last week," Leon Westgate, an analyst with Standard Bank, said in a note.

Copper climbed by more than 2% on Friday after upbeat readings on the U.S. economy supported metals-demand expectations a day after futures had settled at a seven-week low. Copper is widely used in the power, construction and automotive industries, making prices sensitive to such economic news.

Copper's slight declines on Monday came on caution ahead of data later this week that could provide clarity into the health of the world's copper consumer.

Data on Chinese industrial output, inflation and retail sales, among other measures, are scheduled for release on Thursday. China accounts for about 40% of global copper demand.

Copper-market watchers have been keeping a close watch on Chinese inflation in particular. Beijing clamped down on lending last year in an effort to cool rising prices, but easing inflation since has given authorities more room to take steps to stimulate investment in copper-heavy industries, analysts said.

"We think that the Chinese market is likely to tighten steadily if demand accelerates as expected due to higher infrastructure investment," said Wiktor Bielski, an analyst with VTB Capital, in a note.

-Write to Matt Day at matt.day@dowjones.com

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08-06-12 0937ET

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