September 24, 2015 / 2:41 AM / 5 years ago

METALS-London copper posts feeble rebound; China worries sap strength

* China stimulus effect not seen until next year - Argonaut

* Hedge funds waiting for demand pickup to get in - Argonaut

* Coming up: US Durable Goods for August at 1230 GMT (Adds comment, detail, updates prices)

By Melanie Burton

MELBOURNE, Sept 24 (Reuters) - London copper posted a limp rebound from a four-week low on Thursday as renewed concerns over weak demand growth from top consumer China darkened the metal’s outlook against a backdrop of ample supply.

The outlook for the global economy became bleaker on Wednesday as signs of a deeper manufacturing downturn in China emerged, coupled with slow growth in Europe and the United States.

There was increasing evidence that Chinese consumers are holding back spending, also raising a red flag for the global economy.

“The PMIs were not too good,” said analyst Helen Lau of Argonaut Securities in Hong Kong.

“The only good factor is the production cuts by Glencore and Freeport. If production is cut, that means the downside is limited. Some of our hedge fund clients are not too negative now, they are waiting for positive news on the demand side.”

Glencore plans to suspend some copper production at two major copper mines in Zambia and the Democratic Republic of Congo over the next 18 months, while Freeport McMoran Inc plans to close a small U.S. mine and reduce output in two more.

Lau doesn’t expect China’s stimulus to feeds into the real economy until early next year, and copper prices may face more downside pressure before then.

Three-month copper on the London Metal Exchange traded up 0.2 percent at $5,065 a tonne by 0733 GMT from the previous session, when it closed little changed. It hit a four-week low at $5,036 a tonne on Tuesday after nearing a six-year trough of $4,855 a tonne in late August.

Shanghai Futures Exchange copper rose 0.5 percent to 38,850 yuan ($6,088) a tonne.

The outlook for prices is particularly murky at the minute, which alongside holidays in Singapore and Malaysia drained liquidity from the market, a trader said.

“London is sitting on their hands, and Asia and the U.S. have no idea on direction. Plus China is basically off for the next two weeks,” the trader in Singapore said.

Investors that have roiled global markets and thrown the Federal Reserve’s policy off track should focus on the strength of the U.S. economy rather than the more remote risks of a global slowdown, Atlanta Federal Reserve bank president Dennis Lockhart said on Wednesday.

While some miners have curtailed supply there is still plenty new supply coming online.

MMG Ltd’s $7.4 billion Las Bambas project in Peru is on track to start commercial production in May or June of 2016 that will ramp up to 400,000 tonnes of copper in 2017, the mine’s management said on Wednesday.


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 = 6.3809 Chinese yuan Reporting by Melanie Burton; Editing by Ed Davies and Sunil Nair

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