LONDON (Reuters) - Copper slipped on Friday, hurt by a weak euro on concerns about the euro zone debt crisis and uncertainty about the outlook for demand from top user China.
Three-month copper on the London Metal Exchange (LME) closed at $8,015 a metric ton (1.1023 tons) in official rings, down 2.5 percent from the previous close at $8,220.
The dollar rose against the euro as a perceived lack of progress on a Spanish bailout request reminded investors of the headwinds facing the global economy. <FRX/>
A strong dollar makes commodities priced in the U.S. unit more expensive for holders of other currencies.
Volumes, however, remained thin as LME Week - an annual gathering in London of the industrial metals industry - draws to a close.
Copper prices rallied nearly 8 percent in September, fuelled by the third round of quantitative easing (QE) by the U.S. Federal Reserve, the promise of bond buying by the European Central Bank (ECB) and stimulus measures in Japan and China.
The metal used in power and construction though, is down 2 percent since the beginning of in October.
"We had a big rally in base metal prices going into September on anticipation of QE3, the implementation of QE3 and also the raft of policy initiatives announced in China and measures taken by the ECB," said Nic Brown, head of commodities research at Natixis.
"Just don't expect this surge in prices to be sustainable. It was not a real reflection of improved demand in China and it is no surprise to us that base metals prices have come off quite significantly."
Investors' attention has turned to consumer demand in China, which devours as much as 40 percent of the world's refined copper, and by how much its economy might recover in the fourth quarter.
Many economists believe a rebound in China's economy in the fourth quarter is likely to be mild, with the country's Commerce Ministry warning that a recovery trend in exports was not confirmed, despite a surge in September.
The tepid recovery that analysts expect was also underlined by China's foreign direct investment data, which showed inflows falling 3.8 percent in the first nine months from a year earlier. That extended the longest run of declines since the depths of the global financial crisis.
In the euro zone, leaders took a stride towards establishing a single banking supervisor for the region next year, paving the way for the bloc's rescue fund to inject capital directly into ailing banks.
In the physical markets, Chinese spot copper was trading at a discount to the ShFE front-month contract of up to 200 yuan, indicating slow spot demand.
"Chinese copper trading activity has ticked up from before the October 1 National Day holiday but consumer demand remains sluggish overall," said Yang Changhua, an analyst from China's state-backed research firm Antaike.
"We believe demand will improve a bit in the fourth quarter, but prices won't cross above $8,800."
In other metals, LME aluminum, untraded in official rings, was last bid at $1,970 versus Thursday's close of $2,015. Benchmark lead changed hands at $2,115 versus a close of $2,157 on Thursday.
Tin traded at $21,275 from $21,775 while zinc changed hands at $1,885 from Thursday's close of $1,921.
Nickel traded $16,955 from Thursday's close of $17,320.
(Additional reporting by Carrie Ho in Shanghai; editing by James Jukwey)