October 20, 2015 / 1:56 AM / 5 years ago

METALS-London copper steady as China demand concerns drag

* China aluminium semis export window reopens

* China copper output up 1.6 pct in Sept; aluminium up 11 pct

* Coming up: U.S. housing starts, building permits at 1230 GMT (Adds comment, detail; updates prices)

By Melanie Burton

MELBOURNE, Oct 20 (Reuters) - London copper was steady on Tuesday, after dipping to its lowest in nearly two weeks earlier in the day, as a slowdown in economic growth in top user China flattened a seasonal pick-up in demand.

“Pressure on the metals and mining industry has been unrelenting and to be honest, doesn’t look like improving any time soon,” said strategist Daniel Hynes of ANZ in Sydney.

“The data out yesterday was particularly worrying for commodities considering electricity production, industrial production, fixed asset investment all fell. There’s been an implicit feeling that demand would pick up in the fourth quarter - those numbers potentially derail that outcome.”

China’s economic growth fell below 7 percent for the first time since the global financial crisis on Monday, partly hurt by cooling investment, raising pressure on Beijing to further cut interest rates and take other measures to stoke activity.

Three-month copper on the London Metal Exchange was trading flat at $5,214 a tonne by 0713 GMT, after dipping to $5,171 a tonne, its weakest since Oct. 8. It lost 1.5 percent in the previous session.

Prices are struggling to regain upward momentum from six-year lows below $5,000 a tonne seen in late August, with many in the market looking for new lows before year-end.

“I found people at LME Week delusionally optimistic. Everybody thinks there’s a recovery on the cards. There is no recovery on the cards. This is the new normal. The truth is, you’re going to be fighting tooth and nail for business for the next few years,” said a physical trader in Asia. The LME Week industry gathering took place in London last week.

Shanghai Futures Exchange copper fell 0.8 percent to 39,200 yuan ($6,168) a tonne in the late session.

China’s refined copper output rose 1.6 percent in September from a year ago to 680,235 tonnes, data from the statistics bureau showed on Tuesday.

Primary aluminium production in the same period rose 10.8 percent to 2.72 million tonnes, the data showed. Shanghai aluminium has slumped to successive record lows since July, falling another 10 percent, with loss-making producers potentially resuming shipments abroad to capture more attractive global prices.

“Despite the closure of some of China’s outdated capacity, new capacity is being brought on line, and the export arbitrage window is re-opening. Both of these are not helpful for restoring China’s metal balance,” AZ China said in a note.

Despite the strong headwinds from overseas, the U.S. Federal Reserve should soon begin to raise interest rates to slow down economic growth before it becomes unsustainable, a top Fed official said on Monday.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin ($1 = 6.3600 Chinese yuan renminbi) (Reporting by Melanie Burton; Editing by Richard Pullin and Joseph Radford)

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