Copper prices fall on Chinese demand fears

LONDON: Copper prices fell on Friday as data in China pointing to a cooling economy and sabre rattling in a trade dispute between Washington and Beijing led to fears that Chinese demand for metals would fall more than expected.

Benchmark copper on the London Metal Exchange (LME) traded down 1.1 percent at $5,965 a tonne in official rings, although still slightly up on the week.

Worries that the US-China trade dispute will damage growth in China, the world's largest metals consumer, have helped push the metal used in power and construction down almost 20 percent from a June high.

Despite an uptick in Chinese industrial output, data on Friday suggested the country's economy would cool further in coming months and government support measures would take time to kick in.

"The investment data were weak, and that certainly doesn't bode well for future metals demand," said Capital Economics analyst Caroline Bain.

Scepticism over trade talks after US President Donald Trump said Washington was "under no pressure to make a deal with China" also hurt metals prices, she said, adding that copper prices were likely to end the year around current levels.

DOLLAR: Worries about Chinese demand overshadowed a weakening of the dollar of almost 1 percent this week, which should support prices by making metals cheaper for buyers with other currencies.

COPPER TECHNICALS: Copper remains in a short-term downtrend, but is supported between $5,940 and $2,980 by its 8- and 20-day moving averages, brokers Marex Spectron said.

COPPER STOCKS: On-warrant stocks of copper available to the market in LME-registered warehouses rose 2,875 tonnes to 145,400 tonnes, but are down from more than 234,000 tonnes in mid-August, suggesting a tighter market.

Inventories in Shanghai Futures Exchange (ShFE) warehouses also fell to the lowest since November at 124,566 tonnes.

ALUMINIUM/STOCKS: LME aluminium traded down 0.5 percent at $2,054 a tonne and set for a small weekly loss after 29,600 tonnes of fresh cancellations pushed on-warrant LME stocks down to 726,150 tonnes, the lowest since February 2007.

ShFE stocks also down fell to the lowest since March at 853,749 tonnes.

CHINA ALUMINIUM: China's aluminium and steel production fell in August from the previous month, but output of both metals would likely be at a record high this year, analysts at Commerzbank said.

OTHER METALS: LME zinc was did not trade but was bid down 0.6 percent at $2,345 a tonne, nickel traded flat at $12,605, lead was bid 1.1 percent higher at $2,059 and tin traded up 0.1 percent at $19,075.