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Copper price drops 0.3%

THE price of Zambia’s top export earner, copper, on the London Metal Exchange (LME) fell by 0.3 percentage point to US$6,686 a tonne on news that Japan had surprisingly fallen into recession.
According to Reuters, the price of copper slipped from its highest level in a fortnight yesterday as news that Japan had surprisingly fallen into recession tainted previously buoyant sentiment following a slew of improving economic signals from the United States.
Japan’s economy unexpectedly slipped into recession in the third quarter, setting the stage for Prime Minister Shinzo Abe to delay an unpopular sales tax hike and call a snap election just two years after he took office.
“Three-month copper on the London Metal Exchange climbed to its highest since November  4 at US$6,734 a tonne, before trading edging down by 0.3 percent to US$6,686 a tonne from the previous  gain of  0.8 percentage point,” Reuters reports.
However, an analyst said slowing global growth could drag on demand for copper, which is expected to stay muted next year as the market swings into surplus for the first year in six.
“Copper looks range-bound for the rest of the year, around the … US$6,600 mark. Supply continues to be a headwind into next year,” said analyst Daniel Morgan at UBS in Sydney.
The most traded January copper contract on the Shanghai Futures Exchange climbed one percent to 47,630 yuan (US$7,776) a tonne, having also reached a two-week high.
China’s smelters have ramped up output to take advantage of higher processing fees as the past decade’s boom in investment translates into more mine supply.