November 19, 2015 / 2:28 AM / in 5 years

METALS-London copper sinks to six-year lows as China worries persist

* Shfe aluminium sheds 2 pct, closes below 10,000 yuan a tonne

* Shfe nickel, zinc, seen as casualties of China steel woes-trader

* Coming Up: US Philly Fed Business Index for Nov at 0130 GMT (Adds comment, detail, updates prices)

By Melanie Burton

MELBOURNE, Nov 19 (Reuters) - London copper dipped to a fresh six-year-low on Thursday as persistent concerns about ebbing demand from top metals user China eclipsed the impact of a slightly softer dollar.

Federal Reserve officials on Wednesday continued to flag December as a likely time for interest rates to rise after seven years near zero.

Commodity markets should brace for another assault on prices if, as is widely expected, the U.S. Federal Reserve tightens policy in December and the dollar strengthens further.

But some analysts expect that a flurry of deal-making will help set a floor for commodity prices.

“We are already seeing the start of the next bull market in commodities,” said chief investment officer Jonathan Barratt of Ayers Alliance in Sydney.

“The hot money is now moving into the mining sector and areas that represent good value. Just the M&A activity in the sector suggests that smart people are starting to see value there.”

Would-be purchasers like Japan’s Sumitomo Metal Mining and China’s Jinchuan unit are on the prowl for stakes in global copper mines.

Meanwhile Anglo American is to sell two Chilean copper mines to investment firm Audley Capital for $300 million, it said in August, while Glencore is looking for a buyer for a copper mine in Australia.

Three-month copper on the London Metal Exchange edged up by 0.1 percent to $4,616 a tonne by 0725 GMT, paring a 1.6 percent loss in the previous session. Prices earlier fell to the weakest since May 2009 at $4,573.

Shanghai Futures Exchange copper fell 0.4 percent to 34,770 yuan ($5,451) a tonne.

Some Chinese banks, hit by a surge of troubled borrowing in a weakening economy, are increasingly failing to recognise loans gone sour on their books to avoid having to stump up capital.

In news potentially impacting aluminium, twelve U.S. senators urged the Obama administration to enforce duties on Chinese aluminium extrusions.

Shfe aluminium closed down 2 percent, below the 10,000 yuan mark for the first time, in a downward trend that is expected to worsen without large output cuts by producers.

Shfe zinc fell 3.6 percent and Shfe nickel shed 1.7 percent.

“The view is that we’re going to see some destocking and production cuts at steel mills, so zinc is mostly likely a casualty from the non ferrous side. The same for nickel,” said a trader in Shanghai.

Nickel smelter developers are putting projects on hold as they struggle to get financing with metal prices near their lowest in more than a decade.


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 = 6.3787 Chinese yuan) (Reporting by Melanie Burton; Editing by Ed Davies and Sunil Nair)

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