Shanghai copper 1 pct lower, LME around $8,000

SINGAPORE, Sept 26 - Copper prices in Shanghai fell nearly 1 percent on Wednesday as consumers were leery of buying at high prices, while London futures stalled around $8,000 a tonne. ADVERTISEMENT The Shanghai Futures Exchange December copper contract , the most active, fell 610 yuan to 67,410 yuan a tonne at the close. Spot copper prices fell 25 yuan, trading between 67,300 and 67,450 yuan. "The general trend in Shanghai is upward. But even if London prices rally, Shanghai won't rise dramatically," analyst Li Rong at Great Wall Futures said. "Traditionally this is high season for copper consumption, but so far we haven't seen signs of high demand. As London prices keep rallying above $8,000, they put demand in check." Copper for delivery in three months on the London Metal Exchange was down $40 at $7,975 at 0711 GMT, after hitting a nine-week high of $8,070 on Tuesday. "If prices in London can rally another $200 or $300 from $8,000, Shanghai will catch up," a trader in Shanghai said, adding that if Shanghai copper stocks fall by more than 10,000 tonnes this week, London may rally above the May 2006 record high of $8,800 during next week's five-day National Day holiday in China. Shanghai copper inventories fell 6 percent last week to 55,981 tonnes, down from just under 100,000 tonnes mid-year. Weak data from the United States on Tuesday -- the pace of U.S. existing home sales fell sharply in August and consumer sentiment was at it lowest since November 2005 -- weighed on the dollar, as expectation of a further interest rate rose. The euro hit a record high against the dollar of $1.4163 on electronic trading platform EBS in early Tokyo trade. "Our house view calls for further rate cuts and a weaker dollar. The 45,188 euro -- it used to be $64,000 -- question is what a weaker U.S. economy means for commodities demand," National Australia Bank analyst Gerard Burg said, He added that commodities remained very China-centric and demand, especially from infrastructure projects, would shield metals markets from a mild slowdown in the United States. That view echoed comments by BHP Billiton which said in its annual report that the global outlook remained robust, driven by solid activity in Asia and Europe, while growth in China's demand for raw materials should continue. BHP also upgraded the size of its total ore resource at the giant Australian Olympic Dam uranium, copper and gold mine by 75 percent to 7.7 billion tonnes. Despite the positive comments, BHP shares in Australia fell 3.2 percent in an otherwise steady market. Lead was steady at $3,390. Prices were supported by a new investigation into lead contamination at the minerals export port of Esperance following the discovery of high levels of lead in rainwater tanks. Lead shipments via Esperance from a mine run by Magellan Metals have been suspended since March after thousands of bird deaths in the area due to lead contamination. Also supportive was news that Grupo Mexico, plagued by strikes at its copper operations in Mexico and Peru, was shutting its Taxco silver and lead operation in Mexico because of labour problems and dwindling reserves. Aluminium rose $5 to $2,461. A sustained move above $2,500 was likely to attract fund buying interest based on an improved technical outlook, Triland Metals, an LME brokerage said. Traders have suggested that some investors may be tempted to sell stalled copper futures and buy aluminium. NAB's Burg said that might be a risky strategy. "There is a lot of excess smelter capacity that could bring aluminium down. The issue is the profitability of smelters, especially in China and whether they can bring on production," he said. Metal Prices by 0711 GMT: Metal Last Change Pct Move End 2006 Pct chg 07 LME Cu 7975.00 -40.00 -0.50 6330.00 25.99 SHFE Cu* 67410.00 -610.00 -0.90 60080.00 12.20 LME Alum 2461.00 5.00 +0.20 2805.00 -12.26 SHFE Alum* 19350.00 -10.00 -0.05 20550.00 -5.84 COMEX Cu** 361.15 0.00 +0.00 287.10 25.79 LME Zinc 2915.00 -10.00 -0.34 4230.00 -31.09 SHFE Zinc* 26435.00 -80.00 -0.30 28915.00 -8.58 LME Lead 3390.00 0.00 +0.00 1670.00 102.99 ** 1st contract month for COMEX copper * 3rd contact month for SHFE aluminium, copper and zinc SHFE zinc began trading on March 26, 2007.