Bloomberg reported that copper declined from a one week high as Moody’s Investors Service was considering a downgrade of debt ratings for European banks increasing concern that the region’s policymakers may struggle to contain the crisis.

The contract for three month delivery dropped as much as 1.3% to USD 7,395 per tonne on the London Metal Exchange and traded at USD 7,467. The metal rallied as much as 4.2%. Copper for February delivery on the Shanghai Futures Exchange was little changed at CNY 55,420 per tonne.

Moody’s said it may lower debt ratings for banks in 15 European nations. All subordinated, junior-subordinated and Tier 3 debt ratings of 87 banks in countries where the subordinated debt incorporates an assumption of government support were placed on review for downgrade.

Mr Xie Xiaoming an analyst at Shengda Futures Company in Guangzhou said that “Europe’s debt crisis is still the biggest concern. The focus is how effective the leaders’ measures will be in solving the problem.”

Euro area finance ministers will meet in Brussels to work out details on how the European Financial Stability Facility will boost its muscle by insuring sovereign debt with guarantees. Moody’s said the rapid escalation of Europe’s debt and banking crisis is threatening all of the region’s sovereign ratings.

(Sourced from Bloomberg.net)