April 6, 2016 / 4:11 AM / in 4 years

METALS-Copper holds near one-month low on China demand concerns

* Copper has fallen nearly 7 pct since mid-March
    * China demand growth to slow
    * Aluminium, lead, zinc tick lower

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, April 6 (Reuters) - Copper clung to small
overnight gains on Wednesday supported by a weaker dollar, but
it remained within striking distance of a one-month low on
concerns over demand from top consumer China.
    Copper rallied in the beginning of the year along with other
commodities, but has fallen nearly 7 percent since hitting a
four-month peak in mid-March.
    Analysts say the price rally was overdone and that physical
demand has not risen.
    Three-month copper on the London Metal Exchange was
little changed at $4,779 a tonne by 0732 GMT. The metal hit a
one-month low of $4,751 on Tuesday before closing the session up
0.3 percent.
    The most-traded copper contract on the Shanghai Futures
Exchange closed flat at 36,730 yuan ($5,671.10) a
tonne.
    "We are forecasting the price to go down mainly because the
demand growth is weaker this year," said Chunlan Li of
consultancy CRU in Beijing.
    "Demand has picked up month-on-month, but is still low as
compared with the same period last year," she said. 
    Li expects Chinese copper demand to grow 0.6 percent this
year, lower than the 3.8-percent growth seen last year. 
    Copper prices are expected to slide below January's 6-1/2
year lows, hit by a lack of production cutbacks and weak demand
in the world's biggest metals consumer China, said GFMS analysts
at Thomson Reuters. 
    Data on Wednesday showed that activity in China's service
sector strengthened in March, but employment fell for the first
time in over 2.5 years, sending mixed signals on the health of a
sector, which Beijing is counting on to offset prolonged
weakness in manufacturing. 
    For now, copper was supported by a softer dollar that makes
the greenback-denominated commodities cheaper for holders of
other currencies.
    The dollar hovered near a 17-month low against the yen on
Wednesday. 
    Aluminium extended losses, falling over 1 percent in
its biggest drop in two weeks. It slid to a one-week low of
$1,495.50. 
    Zinc dropped 1 percent to $1,795. 
    Lead fell to a fresh five-week low of $1,690.
   
    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 = 6.4767 Chinese yuan renminbi)

 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford and
Sherry Jacob-Phillips)
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