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Copper fell, extending yesterday's declines, as participants worried demand for the metal might slow next year as the slowdown in US economic growth starts to impact other economies, specifically in Europe

Falls were limited, however, by the prospect of impending strike action at Xstrata, the world's fourth largest copper producer, and by ongoing labour negotiations at Chile's Codelco, the largest

At 1.20 pm, LME copper for three month delivery edged down to 6,875.50 usd a tonne against 6,990.00 usd at the close yesterday

"Although recent economic data from Europe suggest a robust growth trend, the economies can not stay away for long from the double whammy of strengthening domestic currency and slowing US (growth)," said Standard Bank analyst Michael Skinner. The euro last week rose to 20 month highs against the dollar and while it has given back some of those gains this week, its overall strength against the greenback could adversely impact European exports going forward

Copper fell almost 3 pct yesterday after a lacklustre options declaration and on the back of a slight pick-up in the dollar. Copper is traded in dollars so a stronger US currency makes the metal more expensive

BNP Paribas analyst David Thurtell noted the strong fall in copper came despite worries over reports that a union leader at Xstrata's Altonorte smelter in Chile said workers will vote to strike on Dec 8-9 amid a wage dispute

"The move in cancelled warrants and warehouse stocks were both bearish on this metal too," he added. Cancelled warrants represent warehouse stocks booked and due for delivery

Copper has been under pressure recently from worries over slowing US economic growth and rising inventories, which have increased about 40 pct since mid-October

Elsewhere, aluminium remained under pressure after closing nearly 2 pct lower yesterday as hopes that the December options expiry would be accompanied by volatile prices were dashed, said UBS Investment Bank analyst Robin Bhar

Aluminium for three month delivery fell to 2,776.50 usd from 2,780.00 usd at the close yesterday

The metal rose to a six month high on Tuesday as traders noted a large amount of option contracts to buy aluminium at 3,000 usd a tonne -- significantly above the metal's recent trading range -- were still outstanding

An options expiry refers to the final date by which holders of options can buy or sell a futures contract at a pre-specified price

"We suspect there was never the intention to exercise the options but to keep the market tight and support prices. A similar ploy might be instigated next month," said Bhar