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Shanghai copper falls on weak China demand and strong dollar

Shanghai copper fell on Wednesday as traders lost confidence due to a weak Chinese demand, high prices, and a strong US dollar.

The Shanghai Futures Exchange's most active copper contract closed the daytime trade down by 0.13% to 85,420 yuan (11,992.14) a metric tonne.

The two sessions of gains were halted by this session, which was supported by strong industrial output in China and new attempts to ease Sino U.S. Trade tensions.

The benchmark contract for three-months copper on the London Metal Exchange rose 0.41%, to $10.667 per ton at 0700 GMT.

The red metal's demand is muted by the low acceptance of high prices from downstream buyers.

It's a good thing the copper price was lowered a bit as this could encourage some real consumption by downstream buyers. "They were not buying anything before," said a Shanghai copper trader, who requested anonymity because he was not authorized to speak to media.

In recent days, the stronger dollar has put pressure on copper prices. The metal's losses were narrowed by a slight retreat on Tuesday.

The greenback price of commodities increases when the dollar is stronger.

Traders are closely monitoring the developments in the China-U.S. Trade Conflict ahead of a meeting planned between U.S. president Donald Trump and his Chinese equivalent Xi Jinping, next week.

Copper prices are still held at a minimum by the supply shortage caused by mine disruptions. Any decline is therefore limited.

Aluminium, zinc, tin, and nickel all saw a slight decline. Lead was also little changed.

Aluminium gained 0.58%. Zinc added 0.52%. Lead was up 0.38%. Nickel was up 0.20%. Tin saw a gain of 0.37%. $1 = 7.1230 Chinese Yuan (Reporting and editing by Sherry Jackson and Subhranshu Saghu).

(source: Reuters)