LME copper and aluminum dropped down ahead of EU summit

London copper dropped on Wednesday, snapping two straight days of gains, as investors shied away from riskier assets on growing conviction that a European summit this week will fail to resolve the region's intractable debt crisis. But expectations that top copper buyer China could be lured by low prices and start restocking could help check losses.

Three-month copper on the London Metal Exchange fell 0.2 percent to $7,344.50 a tonne by 0717 GMT. LME copper has shed about 16 percent from a peak of $8,765 struck in February.

The most-active Shanghai October copper contract rose 0.2 percent to 53,740 yuan ($8,400) a tonne, reversing earlier losses, on limited restocking by Chinese consumers at recent low prices. Shanghai copper hit a low of 53,420 yuan a tonne earlier in the session, its lowest since June 12.

"Shanghai base metals are under pressure today as their prices have not fallen as much as their London counterparts over the past few weeks. Yesterday's steep decline in Shanghai aluminium prices drew all the bears out," Li added.

Shanghai aluminium fell to its lowest in more than three years of 14,925 yuan per tonne, after a steep drop in the previous session on news China's top aluminium producing province was giving some smelters a discount in their electricity bill, fuelling fears this would worsen China's aluminium overcapacity problem.