London - Copper dipped for a second day on Tuesday as investors waited for Federal Reserve Chairman Ben Bernanke to clarify the US central bank's plans for its monetary stimulus programme at a two-day meeting starting later in the session.
Also a drag was news that China's home price rises slowed for a second straight month in May from the previous month, in a sign that Beijing's attempts to bring stability to a frothy property market are having some effect.
China is the world's top consumer of copper, a metal used extensively in house-building.
Benchmark three-month copper on the London Metal Exchange had dropped 0.77 percent to $7,027.50 a tonne by 11:20 SA time.
Copper posted its steepest weekly decline since mid-April last week, though it has been mostly range-bound between $6,800 a tonne and $7,400 a tonne for the last two months.
“Expectations the Fed might discuss early tapering of quantitative easing are putting downward pressure on prices, but fundamentally the market is directionless, demand is not growing strongly and supply is picking up,” said Citi analyst David Wilson.
“Supply losses so far, including Grasberg and Bingham Canyon are still below recent trends,” he added.
The Fed's bond-buying programme, has underpinned global markets broadly, but recent comments by chairman Ben Bernanke that he might slow the $85 billion monthly bond purchases if the US economy improves has unnerved investors.
Elsewhere, news that Indonesia's government may decide this week on whether to allow Freeport McMoRan Copper and Gold Inc
to resume open-pit mining at Grasberg, also dragged on copper.
Grasberg is the world's second largest copper mine.
It has been shut since May 15, a day after a training area in a tunnel caved in killing 28 workers.
That disruption, plus others in India and the United States had been helping underpin copper.
Still, daily LME stocks data showed the copper market is well supplied, with stocks currently up 2,675 tonnes at 632,150 tonnes, their highest level in a decade.
In other metals, three-month aluminium fell 0.37 percent to $1,837.75 a tonne, having hit a low of $1,836 a tonne earlier, near its weakest point since mid-May.
The aluminium sector, burdened by overproduction, was jolted after data showed an inflow of 68,725 tonnes of stocks into warehouses, which sent the total to a new record of 5.348 million tonnes. - Reuters