SINGAPORE, June 19 - Shanghai copper fell almost 1.5 percent on Tuesday as investors cashed in positions after London futures failed to sustain a rally above $7,600 a tonne in the previous session.
The most-active September copper contract on the Shanghai Futures Exchange fell to 64,450 yuan ($8,455) a tonne at midday, from 65,400 yuan on Monday.
"The market is disappointed with the failure to maintain the rally in London and investors are adjusting their expectations," said analyst Wang Zheng at consultancy Fubao Metals.
He said a slowdown in U.S. growth and long-awaited cooling measures in China are weighing on sentiment for the metal.
Shanghai spot copper fell to between 63,200 and 63,300 yuan, down 275 yuan.
Copper for delivery in three months on the London Metal Exchange fell $65 to $7,475 a tonne at 0346 GMT. Copper rallied 2.6 percent on Monday to touch $7,696 in electronic trading, its highest since mid-May.
"This $7,600 level was a key point and the fact we couldn't pull away from it was disappointing," Man Financial analyst Edward Meir said.
"In the longer term, we are looking for prices to hold at current levels for the rest of the year and to fall by 10 to 15 percent in 2008," he added.
STRIKE THREATS SUPPORT PRICES
A crop of strike threats in North and South America underpinned prices, drawing attention to falling stockpiles in LME warehouses, which now stand at 116,600 tonnes.
Inventories are equivalent to just over four days of world consumption, having fallen 45 percent from a three-year high in February.
Managers at the Canadian Copper Refinery in Montreal are trying to ramp up production to around 35 percent of capacity after a strike forced the owner, Anglo-Swiss company Xstrata Plc , to declare force majeure at the plant which produced around 300,000 tonnes of copper last year.
Xstrata said no meetings were planned to resolve the dispute.
In Chile, contract talks at Collahuasi, one of the world's largest copper mines, stalled on Friday with time running out for the mine and union workers to reach a deal.
And in Peru, workers at Southern Copper's two copper mines and a smelter will go on strike June 23. [ID:nN15289707]
LME aluminium was up $4 at $2,710, after shedding 1.6 percent on Monday.
The world's largest mining group, BHP Billiton Ltd., , is considering bidding for aluminium producer Alcan Inc. and has hired an investment bank, sources familiar with the matter said. [ID:nSYD124661]
Alcan is already the subject of a $28.7 billion hostile offer by Alcoa Inc. , which has also been cited as a takeover target for BHP Billiton.
Sources told Reuters that BHP has hired Merrill Lynch & Co.
to explore the possibility of buying Alcan, but
stressed that such a move was not definite.
Metal Prices at 0345 GMT
Metal Last Net Change Pct Move
LME Cu 7475.00 -65.00 -0.86
SHFE Cu* 64450.00 -950.00 -1.45
LME Alum 2710.00 5.00 +0.18
SHFE Alu* 19350.00 -30.00 -0.15
COMEX Cu** 342.05 0.00 +0.00
LME Zinc 3650.00 &n
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