LME copper slips, still set for biggest weekly rise since May


Copper produced in Zambia by Buana Mukubwa Mining (MNM Picture)

Copper produced in Zambia by Buana Mukubwa Mining (MNM Picture)

* South Korea copper tender premiums jump 50 pct from June

* Markets eye next week’s Fed meeting for trading cues

* Trade thin with Singapore on holiday due to elections

* Coming up: U.S. Univ of Michigan sentiment index at 1400 GMT

By Melanie Burton

MELBOURNE, Sept 11 (Reuters) – London copper edged down on Friday but was still set for its biggest weekly gain since early May, with a string of output cut announcements set to bring supply closer to demand.

Prices hit the highest in seven weeks on Thursday, extending a rebound from a 6-year trough below $5,000 plumbed late last month that has triggered a raft of production cuts by major miners, including Glencore and Freeport, and offered a floor to prices.

« It’s been a great week for copper. Can it sustain? Best case scenario for next week would be holding gains, » said analyst Dan Morgan of UBS in Sydney.

« I don’t think the announcements this week from Glencore are a reason for copper to lift substantially. I’d characterise it more as a support. If copper goes off to the races, then people who say they are going to shut mines can reopen. What I’m really looking to see is an improvement in demand. »

UBS sees copper prices averaging $2.75 a pound ($6,062 per tonne) in the fourth quarter.

Three-month copper on the London Metal Exchange had slipped 0.4 percent to $5,375 a tonne by 0728 GMT, after closing a tad firmer in the previous session. Prices are set to close the week up nearly 5 percent, having struck the highest since July 22 at $5,435 a tonne on Thursday.

Shanghai Futures Exchange copper climbed 0.5 percent to 41,160 yuan ($6,457) a tonne. Prices failed to push through resistance at the 100-day moving average at 41,229 yuan, which could trigger disappointed longs to cut holdings next week.

Traders are now awaiting the U.S. Federal Reserve’s next policy statement on Sept. 17 for clues on the timing of a U.S. interest rate rise.

The U.S. labour market appeared to gain momentum in early September as fewer Americans filed for weekly unemployment benefits, but weak inflation pressures may complicate the Fed’s decision whether to hike rates.

UBS’s Morgan was hopeful but not confident commodities markets would take a September rate rise in their stride.

« That would send a very good signal for market confidence. »

Still, worries over the health of China’s economy and the impact on its metals demand are looming over the metals market, even as the country quickens approval for infrastructure projects.

China’s economic planner approved on Friday 143 billion yuan ($22.4 billion) worth of new railway projects that include a new high-speed railway line in central China.

Reflecting improving demand for copper in the region, South Korea bought 3,000 tonnes of copper from Glencore for $104, the highest premium since June last year and up a sharp 50 pct from $69 in the last tender two months ago.

Most active ShFE tin ($1 = 6.3722 Chinese yuan renminbi) ($1 = 6.3745 Chinese yuan renminbi) (Reporting by Melanie Burton; Editing by Himani Sarkar and Joseph Radford)