METALS-Copper heading for weekly fall on bleak global growth outlook

Copper prices rose on Friday but were set to end the week slightly lower as traders balanced hopes for solid demand in China with pessimism about the global economy.

Inflation data in Germany and Japan on Friday and statements from European and U.S. central bankers this week suggest that rapid, economically damaging interest rate rises will continue.
Investors turned cautious, pushing down global equities and driving up the U.S. dollar – pressuring dollar-priced metals by making them costlier for buyers with other currencies.

Many analysts expect recessions in Europe and the United States and slower growth elsewhere, including in China, the biggest metals consumer.

However, China is widely expected to lower its benchmark lending rates on Monday and has pledged other stimulus to support its economy.

And its copper market looks tight. Yangshan copper import premiums surged to $107 a tonne, from less than $10 in March, suggesting greater appetite for overseas metal.

Copper stocks in Shanghai Futures Exchange (ShFE) warehouses fell to 31,205 tonnes on Friday from 41,811 tonnes a week earlier.

Chinese demand is unlikely to revive strongly because its property market is in crisis, infrastructure construction is not rapid enough and export demand is weak, said Julius Baer analyst Carsten Menke.

“I would not bet on any further recovery (in metals prices) from here,” he said.

Benchmark copper CMCU3 on the London Metal Exchange (LME) was up 0.4% at $8,060 a tonne at 1024 GMT but down 0.3% this week.

Prices of the metal used in power and construction have risen from a low of $6,955 a tonne in July but are down 17% this year.

Many analysts predict rapid copper supply growth next year and a market surplus.

LME aluminium CMAL3 was down 0.5% at $2,390 a tonne, zinc CMZN3 was up 0.8% at $3,499.50, nickel CMNI3 was flat at $21,785, lead CMPB3 fell 0.5% to $2,062.50 and tin CMPB3 was down 0.2% at $24,550.

They were all down between 2% and 6% this week.
Source: Reuters (Reporting by Peter Hobson Additional reporting by Siyi Liu and Dominique Patton; Editing by Susan Fenton)