June 4, 2015 / 10:23 AM / 5 years ago

METALS-Copper touches 6-week low under $6,000 on slack China demand

* China entering seasonally weak period for copper demand

* However, China’s easing measures seen supporting economy

* China aluminium imports to rise due to attractive prices

* Tin prices close to bottom as stocks fall-analyst (Updates with closing prices)

By Maytaal Angel and Eric Onstad

LONDON, June 4 (Reuters) - Copper slipped below $6,000 a tonne to a six-week low on Thursday, hurt by signs of lacklustre demand in China, the world’s top user of the metal, and on risk aversion in wider financial and commodity markets.

A deluge of Chinese data due next week may show some signs of steadying thanks to stimulus measures, but analysts say more support is needed to counter headwinds from a property downturn and patchy exports.

“For the rest of the month I think we’ll stay rangebound in copper with a downside bias. The reason is weak premiums, high scrap discounts and because it might take the rest of the summer before demand improves,” said Patrick Jones, metals analyst at Nomura.

Three month copper on the London Metal Exchange closed down 1.6 percent at $5,915 a tonne, its weakest since April 23.

It also ended below the 100-day moving average, a key level that may stimulate more selling by investors who regard the breach as a signal of further weakness ahead.

In the wider markets, a persistent sell-off in bonds left confidence in short supply, with global stocks lower; while oil prices slipped ahead of Friday’s OPEC meeting.

The seasonally strongest quarter for copper demand in China is passing its peak with factories eyeing a summer production slowdown, leading to expectations of lower metal consumption.

“For copper, like iron ore, expectations are that demand will slow through summer. We don’t see a major uplift from current levels,” said analyst Lachlan Shaw of UBS in Melbourne.

Aluminium shed 0.6 percent to end at $1,743 a tonne, but losses were limited by reports that Chinese imports of primary aluminium ingots were likely to rise in the coming months after the price of the metal retreated on the global market, prompting end-users to buy.

Tin dropped 1 percent to close at $15,450 a tonne, but a steady fall in LME inventories to the lowest levels since December 2008 signalled that the price may not have much downside, an analyst said.

“We believe tin prices are close to their bottom, and if dwindling stocks are any indication, a recovery towards the second half of the year is probably likely,” said Thomas Höhne-Sparborth, senior economic analyst at consultancy Roskill.

“Such a recovery, however, may be relatively modest, up to around $17,000-$18,000/t,” he told the Reuters Global Base Metals Forum.

Nickel ended 0.4 percent weaker at $12,950 a tonne, given prospects that Shanghai will widen the brands it accepts for delivery against its new contract and after LME stocks rose to another record peak.

Lead slid 1.3 percent to finish at $1,927 a tonne and zinc also gave up 1.3 percent to $2,142.


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 = 6.1976 Chinese yuan renminbi Additional reporting by Melanie Burton in Melbourne and Eric Onstad in London; Editing by William Hardy and David Evans

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