February 10, 2016 / 3:17 AM / in 4 years

METALS-London copper slips amid China holiday, global growth woes

* Pressure on Indonesian, Zambian copper supply to ease

* China markets closed for new year break; to reopen Monday

* Further dollar weakness to support metals (Adds detail, updates prices)

By Melanie Burton

MELBOURNE, Feb 10 (Reuters) - London copper fell near its lowest level in a fortnight on Wednesday as holidays in top consumer China entered a third day, dampening demand, while global growth fears dragged on prices.

Worries about the health of the euro zone banking sector this week have soured sentiment and sparked fresh fears over the global economy, with a very easy monetary policy seen crimping bank profits and consequently the banks’ ability to repay debt.

Fears over banking solvency have put paid to the past fortnight’s recovery in metals prices, as investors fled into safe-havens, helping the U.S. dollar recover from four-month lows.

“We still think the dollar selloff is not yet over and that commodities could push slightly higher over the short-term,” said INTL FC Stone in a research note.

European finance ministers will call on the Group of 20 biggest world economies at the end of February to boost global economic growth at a time when a slowdown in China is sending shivers through financial markets.

Souring sentiment towards metals, Big European bank stocks, mired by a seemingly endless list of investor concerns, are being sold-off more brutally than they were at the start of the financial crisis in 2008.

Three-month copper on the London Metal Exchange traded flat at $4,510 a tonne by 0646 GMT, after falling 2.2 percent in the previous session. Prices struck $4,466.50 a tonne on Tuesday, the weakest since Jan. 26.

The Shanghai Futures Exchange is closed for Lunar New Year celebrations and will reopen on Monday.

In news that douses hopes a copper price recovery could come from cuts to supply in the near term, Zambia, Africa’s second-largest copper producer, scrapped a nearly 73 percent hike in electricity tariffs for industrial and commercial users, state power firm Zesco said.

Indonesia’s mining ministry has also recommended that Freeport McMoRan Inc receive a new six-month copper export permit, potentially ending a near two-week stoppage after the previous permit expired last month.

Meanwhile, Australia’s OZ Minerals Ltd is set to announce plans for a new copper project after a board meeting on Feb. 25, the Australian miner said on Wednesday, after reporting a near tripling in annual net profit in line with market forecasts.

In other metals, traders have been making fresh bets on a further fall in nickel prices, with premiums for $8,000 put options doubling to near $200 this week from last week, and fresh interest seen in puts for $7,000 by June. <0#MNI+>


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 (Reporting by Melanie Burton; Editing by Richard Pullin and Anand Basu)

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