September 13, 2016 / 3:28 AM / 4 years ago

METALS-Copper holds above 12-wk low on China data, as rate hike jitters subside

* China private sector fixed asset investment up 2.1 pct

* Industrial output up 6.3 pct vs 6.1 pct forecast (Adds detail; updates prices)

By Melanie Burton

MELBOURNE, Sept 13 (Reuters) - London copper held above a 12-week low on Tuesday, underpinned by a raft of rosier China data and after comments by a Federal Reserve official that assuaged concerns the U.S. central bank could hike rates as soon as next week.

China’s industrial output grew the fastest in five months in August as demand for products from coal to cars rebounded thanks to higher government spending and a year-long credit and property boom.

“At the end of the day, this is an encouraging sign that China’s economy is responding, albeit slowly, to government support,” said chief investment officer Jonathan Barratt of Ayers Alliance in Sydney.

He added the improvement should stimulate restocking along the supply chain, supporting appetite for industrial metals.

Meanwhile, strong comments from China’s top state planner that the economy needed more support were most likely aimed at persuading the central bank to take bolder policy action.

Three-month copper on the London Metal Exchange was up 0.1 percent at $4,652 a tonne by 0725 GMT, following a small gain in the previous session when prices plumbed $4,582 a tonne, their weakest since June 20.

Shanghai Futures Exchange copper held 0.7-percent gains at 36,600 yuan ($5,481) a tonne. But zinc and nickel were caught in steel’s down draft, slipping by 0.6 and 1 percent respectively, on worries over demand.

The Federal Reserve should avoid removing support for the U.S. economy too quickly, Fed Governor Lael Brainard said on Monday in comments that solidified the view the central bank would leave interest rates unchanged next week.

Big Japanese manufacturers turned optimistic about business conditions in the third quarter and companies revised up their capital expenditure plans, a government survey showed on Tuesday, in a sign the economy is gaining momentum.

In the United States, the Commerce Department said on Monday it had made a preliminary finding that imports of stainless steel sheet and strip from China are being dumped in the U.S. market at below fair value.

Standard Chartered said in a report that China was likely to step up its exports of semi-processed aluminium metal to global markets this year, and carve out a bigger market share, since a price revival triggered restarts.

China’s semi-manufactured aluminium exports jumped 17 percent on the year to 410,000 tonnes in August.

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 = 6.6797 Chinese yuan Reporting by Melanie Burton; Editing by Richard Pullin and Biju Dwarakanath

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