November 11, 2015 / 7:35 AM / 5 years ago

METALS-Copper teeters near 6-yr low, markets eye China data

* Base metals have already hit hard landing in China-trader

* Shanghai aluminium, zinc, at weakest in around 10 years (Adds detail, updates prices)

By Melanie Burton

MELBOURNE, Nov 11 (Reuters) - London copper veered towards six-year lows on Wednesday, with metals markets braced for fresh pressure after a gauge of China’s factory health showed ongoing weakness in the world’s top metals consumer.

Growth in China’s factory output eased in October while retail sales edged up and investment inched lower, indicating persistent downward pressures on the economy that may require further policy support.

“China’s recovery is slow. It’s really affecting all the base metals across the board,” said analyst Helen Lau of broker Argonaut Securities in Hong Kong.

Factory output grew slower than expected at an annual 5.6 percent in October, fixed asset investment rose 10.2 percent in the first 10 months, slightly slowing from a 10.3 percent gain in the January-September period.

Three-month copper on the London Metal Exchange fell 0.5 percent to $4,902 a tonne by 0703 GMT, its weakest since a six-year low of $4,855 in late August and following losses of nearly 1 percent from the previous session

LME aluminium slid 1.2 percent, while LME zinc fell 1.8 percent, hitting a fresh six-year low, and lead dropped 1.4 percent.

Shanghai Futures Exchange copper also came within a whisker of its weakest since July 2009, falling as far as 37,050 yuan a tonne, near the 37,030 hit in August, while Shfe aluminium flirted with the 10,000 yuan level which would be its weakest in a decade.

Suggesting low prices are doing little to entice fresh demand, copper premiums for metal in Shanghai bond edged down by $2.50 to $87.50, the lowest since mid August. CU-BMPBW-SHMET

“Metals markets in China have already faced a hard landing,” said a trader in Hong Kong, adding that a recent flattening of the Chinese onshore-offshore yuan differential had ended an arbitrage play, taking out a large chunk of metals demand.

“Base consumption has not disappeared, but demand certainly is much weaker now compared to last year.”

In Japan, manufacturer confidence fell in November for a third straight month to levels unseen in about 2-1/2 years, a Reuters poll showed, reflecting fears that a China-led slowdown in overseas demand may have pushed the economy into recession.

An undersea earthquake measuring 6.6 magnitude struck on Wednesday off Chile, the world’s top copper producer, but there was no tsunami threat, said the Pacific Tsunami Warning Centre in Hawaii. The country’s regular earthquakes can disrupt copper output.

PRICES

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 = 6.3626 Chinese yuan renminbi) (Reporting by Melanie Burton; Editing by Joseph Radford and Richard Pullin)

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