Copper slips, still set for biggest weekly rise since May

[LONDON] Copper fell on Friday on persistent fears about a hard landing in top consumer China and on a possible US interest rate rise next week, although the metal was still set for its biggest weekly gain since May thanks to output cut announcements.

Copper hit a seven-week high this week, mostly due to an announcement by commodities giant Glencore that it plans to cut 400,000 tonnes of output over the next 18 months.

US-listed Freeport became the first big miner to cut output last month. On Friday it revised down its 2015 forecast for copper concentrate sales from its Indonesian unit by 3 per cent.

But weighing on investor nerves again was China, where traders said premiums for term shipments of refined copper cathode to the country were likely to drop further in 2016 after falling this year. "The China worry hasn't gone away. Glencore was positive but it's not enough to solve copper's problem which is a combination of slowing demand growth and quite a lot of new supply coming on stream," said BNP Paribas strategist Stephen Briggs.

Three-month copper on the London Metal Exchange traded down 1.2 per cent in rings at $5,335 a tonne, but was set to close the week up some 4 per cent. The metal has risen about 10 per cent since hitting a six-year low of US$4,855 on Aug. 24.

Making dollar-priced copper more costly for non-US investors, the dollar rose versus a currency basket ahead of Thursday's rate decision from the U.S. Federal Reserve.

The US labour market appeared to gain momentum in early September, but weak inflation pressures may complicate the Fed's decision whether to increase rates.

Investors are also awaiting Chinese industrial output, retail sales and investment data on Sunday for clues on whether the world's second-largest economy is still losing momentum.

In a bid to boost flagging growth, China's economic planner approved on Friday 143 billion yuan (US$22.4 billion) worth of new railway projects.

Aluminium traded down 0.2 per cent at US$1,634 a tonne but was on course for gains of around 1.5 per cent this week.

Struggling aluminium producers are pinning their hopes on the United States winning a trade dispute lodged at the World Trade Organisation against Chinese export subsidies.

Lead was last bid down 1 per cent at US$1,713 a tonne, but was on course for gains of 3 per cent this week. Daily LME data showed lead stocks fell to 168,600 - down some 24 percent since July.

Tin was last bid down 0.5 per cent at US$15,450 a tonne, nickel was last bid down 2.3 percent at US$10,230 a tonne and zinc was last bid down 1 percent at US$1,796 a tonne.

REUTERS