Copper prices in Shanghai fell for a sixth day on Thursday, tracking losses in commodities overnight, after Japan's business sentiment worsened and a survey showed China's factory output contracted, deepening
fears about the euro zone debt crisis.

    The most-traded February copper contract on the Shanghai Futures Exchange dropped 4.04 percent to 53,460 yuan ($8,400) a tonne at 0701 GMT, off an earlier three-week low of 52,820 yuan. Futures are set for their longest losing streak in more than two years, and have lost 26 percent this year.

    Three-month copper on the London Metal Exchange slipped 0.12 percent to $7,201.50 a tonne, after prices tumbled more than 5 percent overnight.

    The decline on Wednesday was the biggest since Oct. 20. Prices have dropped almost 30 percent from a peak of $10,190 reached in February.

    "Markets are frustrated and disappointed, waiting for a road map on the resolution of the two-year-old debt crisis," said Ong Yi Ling, an investment analyst at Phillip Futures in Singapore.

    "Risk assets are all down. The debt crisis will be with us at least through the first half of 2012."

    Adding to the gloomy outlook was Japan's business sentiment index, which worsened in the three months to December, the central bank's tankan survey showed, as a stubbornly strong yen, Europe's debt crisis and slowing global growth clouded the country's recovery prospects.

    China's factory output shrank again in December after new orders fell, a preliminary purchasing managers' survey showed, entrenching expectations that manufacturers are struggling with waning global demand and tight domestic credit conditions.   
    
    Fears that Europe's troubles are worsening were fanned by rising borrowing costs for Italy and German Chancellor Angela Merkel saying the region should not be counting on European Central Bank intervention to resolve its debt crisis.

    Italy paid a record 6.47 percent for five-year bonds in an auction on Wednesday as investors fled to less-risky assets such as U.S. and German government bonds.

    The most-active March zinc in Shanghai lost 1.7 percent to 14,715 yuan a tonne.

                                                                         
  Base metals prices at 0701 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            7201.50     -8.50     -0.12    -24.98
  SHFE CU FUT FEB2    53460     -2250     -4.04    -25.59
  LME Alum          1979.00     17.00     +0.87    -19.88
  SHFE AL FUT MAR2    15645      -190     -1.20     -7.10
  HG COPPER MAR2     326.20     -1.65     -0.50    -26.52
  LME Zinc          1861.00     16.00     +0.87    -24.16
  SHFE ZN FUT MAR2    14715      -255     -1.70    -24.44
  LME Nickel       17417.00     17.00     +0.10    -29.63
  LME Lead          1985.50    -12.50     -0.63    -22.14
  SHFE PB FUT         15050      -270     -1.76    -17.98
  LME Tin          18700.00    175.00     +0.94    -30.48
  LME/Shanghai arb     240
 
   Shanghai and COMEX contracts show most active months
   ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE  third month
 ($1 = 6.3706 Chinese yuan)

($1 = 6.3706 Chinese yuan)