* BHP Billiton shelves Olympic Dam expansion project
* Short-covering rally seen fading -Sucden
* Coming Up: FOMC meeting minutes; 1800 GMT
(Adds analyst, trader comment, details)
By Melanie Burton
SINGAPORE, Aug 22 London copper eased on
Wednesday from a one-month high hit in the previous session but
news that top global miner BHP Billiton Ltd would delay
project expansion due to a slowdown in China helped to cushion
BHP Billiton shelved its planned $20-billion Olympic Dam
copper expansion as it reported a 35 percent slide in
second-half profit in the biggest sign of the pain inflicted by
a slowdown in economic growth in top metals consumer China.
The miner reported its first annual profit fall in three
years in the face of rising costs and falling commodity prices,
wrapping up a torrid earnings season for the world's biggest
"It may be a fall in profit - but it's still profit,"
Jonathan Barratt, chief executive of Barratt's Bulletin, a
Sydney-based commodity research firm said.
"Any cut in project funding could further erode the copper
supply pipeline ... We are seeing copper prices find a floor and
recover in the fourth quarter," he added.
Three-month copper on the London Metal Exchange had
slipped nearly 0.3 percent to $7,588.75 per tonne by 0705 GMT,
reversing gains seen in the previous session, when prices hit
the highest since July 20, at $7,632 per tonne.
Prices have recovered by nearly 5 percent from the year's
low touched in June, but are still sitting in negative territory
for the year.
The most-traded December copper contract on the Shanghai
Futures Exchange climbed 0.84 percent to 55,330 yuan
($8,700) per tonne.
Global demand for copper is widely expected to outstrip
supply this year despite China's slowing economic growth, on
mine disruptions and a lack of new major copper projects.
The International Copper Study Group (ICSG) said on Tuesday
the global market for refined copper was in a 405,000-tonne
deficit from January to May this year, sharply bigger than a
98,000-tonne deficit in the same period of 2011.
The softer tone was seen in other markets where European
shares retreated in early trade in a technical sell-off, with
analysts saying expectations of more stimulus measures by
central banks were largely priced in and investors were waiting
for fresh catalysts to push the market to new highs.
Tuesday's rally in metals, on the back of a stronger euro
and hopes for a euro zone sovereign debt resolution, may prove
short-lived, said commodities broker Sucden.
"Volumes were significantly higher than we have seen, but
once the short-covering is done we would expect prices to
retreat once again," it said in a research note.
Base metals prices at 0705 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7588.75 -21.25 -0.28 -0.15
SHFE CU FUT DEC2 55330 460 +0.84 -0.05
HG COPPER SEP2 344.40 -0.90 -0.26 0.23
LME Alum 1863.00 -4.00 -0.21 -7.77
SHFE AL FUT DEC2 15250 20 +0.13 -3.76
LME Zinc 1814.75 4.75 +0.26 -1.64
SHFE ZN FUT DEC2 14535 10 +0.07 -1.76
LME Nickel 15887.00 62.00 +0.39 -15.09
LME Lead 1918.00 4.00 +0.21 -5.75
SHFE PB FUT 15000.00 45.00 +0.30 -1.86
LME Tin 18932.00 -18.00 -0.09 -1.40
LME/Shanghai arb^ 964
Shanghai and COMEX contracts show most active months
$1=6.3562 Chinese yuan)
(Reporting by Melanie Burton; Editing by Clarence Fernandez)