SYDNEY, Aug 12 (Reuters): London copper skidded to within sight of its lowest since June on Tuesday, as concerns over geopolitical tensions in Iraq and Ukraine clouded the outlook for demand amid thin summer trade.
Copper prices have been hemmed in a range of $6,950-$7,210 per tonned since July, with demand cooling over the northern hemisphere summer and with a squeeze on metal supply beginning to ebb as key smelters in China and South Korea restart after maintenance.
Improving supply is setting up copper for lower prices in the months ahead, although trading conditions are likely to remain quiet in the near term, analysts said.
"It's peak summer. Volumes are thin. Moves can be exaggerated so people are reluctant to commit to too much trading activity," said analyst Mark Keenan of Societe Generale in Singapore.
Three-month copper on the London Metal Exchange had slipped 0.4 percent to $6,967 a tonne by 0229 GMT, after ending close to unchanged for the past three sessions. A break below $6,951.75 would open the way to prices last seen on June 30.
The most-traded October copper contract on the Shanghai Futures Exchange slid 0.8 percent to 49,470 yuan ($8,036) a tonne and a three-week low.
The US and global recoveries have been "disappointing" so far and may point to a permanent downshift in economic potential, U.S. Federal Reserve Vice Chair Stanley Fischer said on Monday.
Growth momentum in most major developed economies is stable although Germany and Japan both show signs of losing steam, the OECD said on Monday.
Prospects of stimulus in China have supported copper prices. China posted mild consumer inflation on Saturday, well below the annual target in July, giving authorities room to further relax monetary policy, but deflationary pressure for producers remained stubborn, highlighting a wobbly economic rebound.
Among other metals, nickel and tin have scope for further gains as third quarter industrial activity ramps up and given China's depleting stockpiles since Indonesia banned exports of nickel ore in January, Keenan said.
