LONDON/NEW YORK Copper prices slipped on Monday, underperforming the broader commodities market as concerns about China's slowing economy and frustration over the four-year euro-zone debt crisis continued to weigh on already-cautious sentiment.
Much of the pressure on prices reflected disappointment that Beijing failed to launch a new round of monetary easing to boost its economy. Some had hoped new measures would be announced over the weekend.
"The damage has been done overnight as fresh concerns about whether or not China will implement further monetary policy measures to encourage growth took their toll on prices," said RBC analysts.
Any stimulus measures would be considered key to boosting demand for the metal which is used in housing and construction. China is the world's largest copper consumer, accounting for 40 percent of global demand.
"Copper has to deal with what's going on in China. It looks like they might let things cool a bit longer than people think," said Frank McGhee, head metals trader at Integrated Brokerage Services LLC.
The red metal failed to recover even as the euro strengthened against the dollar.
The single currency had been boosted earlier by a weekend report that the European Central Bank's new plan could include buying euro-zone countries' bonds if their borrowing costs breached certain levels, lending weight to the view that the ECB would revive its controversial bond-buying program.
The euro moved off its earlier highs but remained in positive territory after the ECB poured cold water on the report, adding to frustration over lack of progress in solving the four-year euro-zone crisis.
Three-month copper on the London Metal Exchange was last bid down at $7,455 a tonne, from $7,539 at the close on Friday when it rose 1.2 percent.
COMEX copper for September delivery fell 1.41 percent to settle at $3.371 per lb, having traded in a range between $3.3535 and $3.4225 on the day. Prices have fallen 16 percent from year-to-date highs of $4 which were hit in February.
The broader commodities complex was buoyed by a fresh rally in grains prices as the drought across the U.S. Corn Belt continues to wipe out crucial crops. <GRA/> The 19-commodity Thomson Reuters-Jefferies CRB index .CRB was up 0.4 percent.
But both the New York and London markets have been stuck in a narrow range over the past month, with little news to drive prices in either direction. LME copper has traded between $7,300 and $7,600 and COMEX prices have spanned just 16 cents.
LME copper open interest, a measure of a market's liquidity, is languishing at five-year lows. Volumes were slim with around 5,403 lots of copper changing hands.
According to CFTC data for the week to August 14, speculative investors raised their bets on falling prices, increasing the net short position to its biggest level in six weeks, data on Friday showed.
The International Aluminum Institute said daily average primary aluminum output for July dropped to 67,400 tonnes, compared with 67,700 in June and 67,900 in May.
Aluminum producers outside of China, the world's largest producer of the metal, have been cutting production to counter a drop in aluminum prices, but traders said this may do little to bolster the price if other countries such as India seek to make up for the production shortfall this year.
India's aluminum exports could rise 5 percent in the current fiscal year to 325,000 tonnes despite a slowdown in global demand, a senior industry official said.
Three-month aluminum ended at $1,837 a tonne from $1,858 at the close on Friday. The metal has fallen about 10 percent so far this year, after an 18 percent drop last year.
Three-month zinc closed at $1,796 a tonne from $1,797 on Friday, and nickel ended at $15,550 from $15,630.
Lead ended at $1,909 a tonne from $1,895, and tin closed at $18,550 from $18,495.
(Editing by David Cowell and Jim Marshall)