September 14, 2018 / 10:58 AM / 11 days ago

METALS-Copper prices fall on Chinese demand fears

(Updates with closing prices)

By Peter Hobson

LONDON, Sept 14 (Reuters) - Copper prices fell on Friday as data in China pointing to a cooling economy and a worsening trade dispute between Washington and Beijing raised concerns that Chinese demand for metals would fall more than expected.

Benchmark copper on the London Metal Exchange (LME) ended down 1 percent at $5,973 a tonne.

After closing prices were set in the LME's open outcry ring, a Bloomberg report said Trump had asked aides to proceed with tariffs on $200 billion more in Chinese goods.

The report pushed industrial metals prices lower, with copper down 1.9 percent in electronic trading at 1634 GMT and slightly down on the week.

Worries that the U.S.-China trade dispute will damage growth in China, the world's largest metals consumer, have helped push the metal used in power and construction down some 20 percent from a June high.

Despite an uptick in Chinese industrial output, data on Friday suggested the country's economy would cool further in coming months and government support measures would take time to kick in.

"The investment data were weak, and that certainly doesn't bode well for future metals demand," said Capital Economics analyst Caroline Bain, adding that copper prices were likely to end the year around current levels.

DOLLAR: The dollar regained ground after having weakened to the lowest since late July. The weakening had helped to support prices by making metals cheaper for buyers with other currencies.

COPPER TECHNICALS: Copper remains in a short-term downtrend, but is supported between $5,940 and $5,980 by its 8- and 20-day moving averages, brokers Marex Spectron said.

COPPER STOCKS: On-warrant stocks of copper available to the market in LME-registered warehouses rose 2,875 tonnes to 145,400 tonnes, but are down from more than 234,000 tonnes in mid-August, suggesting a tighter market. MCUSTX-TOTAL

Inventories in Shanghai Futures Exchange (ShFE) warehouses also fell to the lowest since November at 124,566 tonnes. CU-STX-SGH

ALUMINIUM/STOCKS: LME aluminium closed down 1.1 percent at $2,043 a tonne and was around 1.5 percent this week even after 29,600 tonnes of fresh cancellations pushed on-warrant LME stocks down to 726,150 tonnes, the lowest since February 2007. MALSTX-TOTAL

ShFE stocks also down fell to the lowest since March at 853,749 tonnes. AL-STX-SGH

CHINA ALUMINIUM: China's aluminium and steel production fell in August from the previous month, but output of both metals would likely be at a record high this year, analysts at Commerzbank said.

OTHER METALS: LME zinc finished down 1.1 percent at $2,334 a tonne, nickel gained 0.4 percent to $12,655, lead ended 0.2 percent higher at $2,040 and tin closed down 0.1 percent at $19,040.

Additional reporting by Manolo Serapio Jr. Editing by Elaine Hardcastle and Edmund Blair

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