Copper clocks biggest weekly rise since May

LONDON — Copper fell on Friday on persistent fears of a hard landing in top consumer China and a possible US rate rise this week, but the metal still set its biggest weekly gain since May thanks to output cut announcements.

Copper hit a seven-week high last week, mostly due to an announcement by commodities giant Glencore that it plans to cut 400,000 tons of output over the next 18 months. US-listed Freeport became the first big miner to cut output last month. On Friday, it revised down its 2015 forecast for copper concentrate sales from Indonesia by 3%.

But weighing on investor nerves again was China, where traders said premiums for term shipments of refined copper cathode to the country were likely to drop further in 2016. “The China worry hasn’t gone away. Glencore was positive but it’s not enough to solve copper’s problem which is a combination of slowing demand growth and quite a lot of new supply coming on stream,” said BNP Paribas strategist Stephen Briggs.

Three- month copper on the London Metal Exchange (LME) ended down 0.5% at $5,370 a ton, but closed the week up 5%. The metal has risen about 10% since hitting a six-year low of $4,855 on Aug. 24.

US September consumer sentiment fell to its lowest in a year while August producer prices pointed to benign inflation pressures that could weigh on the Federal Reserve’s interest rate decision this week.

Still, the US labor market appeared to gain momentum in September, a factor that would argue in favor of a rate hike.

Investors are also awaiting Chinese industrial output, retail sales and investment data on Sunday for clues on the economic outlook there. In a bid to boost flagging growth, China’s economic planner approved on Friday 143 billion yuan ($22.4 billion) worth of new railway projects.

Aluminum ended up 0.2% at $1,639.50 a ton, gaining 2% for the week. Struggling aluminum producers are pinning their hopes on the United States winning a trade dispute lodged at the World Trade Organization ( WTO) against Chinese export subsidies. “Aluminum is not yet out of the woodwork. There’s so much oversupply… such a ( WTO) case will take time,” said Herwig Schmidt, head of sales at broker Triland.

Lead ended down 1.4% at $1,812 a ton, but gained 2.4% this week. Daily LME data showed lead stocks fell to 168,600, down some 24% since July. Tin closed up 1% at $15,525 a ton — its highest since Aug 20; nickel closed down 1.7% at $10,300 but gained 3% for the week, its best weekly gain since May, while zinc closed down 0.1% at $1,812. —