LME copper down 4 pct as Chinese buyers stay away

LONDON, Oct 8 - London Metal Exchange copper fell by four percent on Monday, triggered by lacklustre demand from China after a week-long holiday there, traders and analysts said. ADVERTISEMENT Copper for delivery in three months traded down to $7,885 per tonne, from $8,210 at the close on Friday. It ended Monday's final open outcry session at $7,956 per tonne. "Sentiment in copper has been dented by weaker prices on the return of China to the market following the end of recent holidays," analysts at Barclays Capital said. Copper prices close to historical highs -- the industrial metal's all-time peak was just short of $9,000 per tonne -- may be discouraging buyers, another European metals analyst said. "In the short term, there is an enormous amount of pent up bullishness around the market and a desire to see prices pushed substantially higher before the end of the year," he said. "But in the medium term the problem is that high prices are killing demand. So it's hard to get too bullish about copper at these levels," he added. Copper dragged other metals with it. Steelmaking additive nickel fell more than 5 percent to $29,701 per tonne from $31,400 on Friday, and zinc was down almost 5 percent at $2,910 from Friday's final quote of $3,050/3,055. Nickel ended Monday's trade at $30,150, and zinc at $2,950. In the longer term, Chinese demand would rebound, offsetting slower growth elsewhere, Macquarie Bank said, predicting copper prices would be higher in 2008 than in 2007. "China is the main driver of copper demand," executive director Adam Rowley said, speaking at a seminar hosted by the LME [ID:nL08522566] Structural demand for metals in China and other industrialising nations would support prices despite turmoil in the broader financial markets triggered by the collapse of the U.S. high risk home loans sector, LME broker Triland Metals said in a quarterly report. "The markets have been spooked by the sub-prime crisis. Triland...believes that the downturn in demand will be both localised and short-lived," it said. Figures in the metals industry are gathering in London this week for the LME's annual dinner and events associated with it. Traders also said copper was lower on talk of a possible strike resolution at Southern Copper in Peru. But union leaders said on Sunday that union members had rejected a plan that would have given the government the authority to define a new wage deal and end their 6-day walkout. "The workers have said they wholeheartedly reject the plan to rely on the Labor Ministry and the strike continues," Roman More, head of the union at the Cuajone mine, told Reuters.[ID:nN07318434] Southern's owner, Grupo Mexico , is battling a long term stoppage over pay at its Cananea mine in Mexico. In broader markets, European equities slipped, with the FTSE index <.FTSE> down 0.8 percent by the end of the day. Copper miner Kazakhmys Plc weighed on the index, falling 5.9 percent after it said production was likely to be affected by flooding in one of its mines . Tin ended the official session at $15,600 from $16,100 on Friday. Aluminium closed at $2,393, down $37, and lead closed at $3,675 from $3,690/3,690.50.