* Zinc stocks in LME warehouses climbing
* Supply-side response critical for prices (Adds comment, closing prices)
By Pratima Desai
LONDON, Sept 15 (Reuters) - Copper tumbled to a one-week low on Tuesday, hit by China demand jitters and lower equity prices in Shanghai, before staging a late short-covering rally.
Benchmark copper on the London Metal Exchange closed with a 0.7 percent gain at $5,347 after touching a low of $5,251.
Traders said that a key settlement date on Wednesday and tight supplies for nearby delivery were behind copper’s rise in afternoon trade, but that any recovery is likely to be brief as the focus remains on concerns over top consumer China.
Disappointing industrial output and investment data over the weekend reinforced the view that China, which accounts for about half of the world’s copper consumption, could miss its 7 percent growth target this year.
“For base metals the sustained weakness in China is the main factor and we are still seeing Chinese equity markets falling,” Danske Bank analyst Jens Pederson said.
Chinese equities have lost about 6 percent this week after a 40 percent dive over the summer.
The U.S. Federal Reserve is widely expected to keep interest rates steady when its two-day policy meeting concludes on Thursday, though some analysts expect the Fed to raise rates, bolstering the dollar and hurting industrial metals priced in the U.S. currency.
“Assessments that the (Fed) may be more hawkish than expected on Thursday was an additional factor helping to convince traders to stop last week’s rally,” TD Securities said in a note.
Copper rose nearly 5 percent last week.
Three-month aluminium slipped 0.5 percent to $1,613 a tonne after hitting $1,590, its lowest since Sept. 2.
Zinc ended 0.8 percent down at $1,738 a tonne. It had touched $1,698, its lowest in more than two weeks, earlier in the session as the market fretted about rising stocks in LME-approved warehouses.
Stocks, at 617,325 tonnes, are up more than 40 percent since Aug. 7. MZN-STOCKS
“A concentrate overhang ... alongside still-ample spare smelting capacity in China means lower prices and more mine closures are the only path to sustained refined zinc market deficits,” Standard Chartered said in a note.
“Amid sluggish global metals demand, the complex has reached a point in the cycle where supply-side responses are central to any near-term retightening in fundamentals.”
Lead added 0.7 percent to $1,687 a tonne and Nickel gained 1.8 percent to $10,100.
Tin was untraded at the close but bid 0.2 percent lower to $15,550 after hitting a three-week high of $15,645.
Tin is finding support from falling stocks in LME-registered warehouses and some expectation of lower shipments from top exporter Indonesia.
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
Editing by Dale Hudson and David Goodman