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METALS-London copper dips as demand growth slows, supply weighs

(Updates prices)

HANOI, March 12 (Reuters) - London copper dipped on Friday as a rally that pushed prices to near a 10-year high ran out of steam amid signs of higher supply and weakening demand growth this year.

Three-month copper on the London Metal Exchange fell 0.2% to $9,041.50 a tonne by 0700 GMT. The contract has surged 46% since the beginning of 2020, hitting a 9-1/2-year high of $9,617 a tonne in February.

“We see China’s metals demand stabilising over 2021 following the robust and above-expectations growth recorded in 2020,” said Fitch Solutions in a note while retaining a bearish view on copper in the next six to nine months.

“We see large, new supply coming online in 2021 and expect minimal disruption from COVID-19 in 2021. Key projects across the region in Chile, Peru, Panama and even Ecuador are ramping up, while U.S. production will recover,” the note said.

Yangshan copper premium SMM-CUYP-CN fell to $68 a tonne, its lowest since Jan. 15, indicating weaker demand from top consumer China, while inventories have been rising in both LME and ShFE warehouses. MCUSTX-TOTALCU-STX-SGH

The premium of LME cash copper over the three-month contract CMCU0-3 fell to $11.50 a tonne, its lowest since Feb. 11, suggesting that the nearby supply tightness has eased.

Meanwhile, China’s major copper smelters raised cathode output by 3.3% month on month in February to 745,100 tonnes, research house Antaike said.

The most-traded May copper contract on the Shanghai Futures Exchange closed up 0.7% to 66,920 yuan ($10,308.71) a tonne, tracking overnight gain in London.

FUNDAMENTALS

* LME aluminium fell 0.6% to $2,164.50 a tonne, lead advanced 1.4% to $1,970 a tonne, while ShFE nickel fell 0.8% to 120,950 yuan a tonne and ShFE zinc climbed 2% to 21,870 yuan a tonne.

* Glencore-controlled Antapaccay copper mine, accounting for 8.8% of Peru’s 2020 copper output, announced the suspension of operations due to a road blockade by local communities.

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$1 = 6.4916 yuan Reporting by Mai Nguyen; editing by Uttaresh.V and Rashmi Aich

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