METALS-Copper slides on worries about Federal Reserve stimulus
* Rusal cuts aluminium output by 357,000 T
* Tin exports from Indonesia drop to 11-mth low in July
By Harpreet Bhal and Eric Onstad
LONDON, Aug 19 (Reuters) - Copper prices slipped on Monday, hit by uncertainty about when the U.S. Federal Reserve could ease back on stimulus that has helped fuel gains in commodities in recent years.
Three-month copper on the London Metal Exchange closed 1.3 percent weaker at $7,305 a tonne, as some investors booked profits after the market gained 1.7 percent last week.
That was the third straight weekly gain for the metal used in power and construction, which has risen more than 11 percent from three-year lows hit in late June. Prices, however, are still more than 7 percent lower in the year to date.
The Fed publishes the minutes of its July 30-31 meeting on Wednesday, and uncertainty remains over the pace and timing of plans to trim its bond-buying programme.
The ultra-loose monetary policy adopted by central banks around the world in the last few years has drawn investors to commodities as an alternative to interest-bearing assets.
"The base metals market has recently experienced a short squeeze, catalysed by strong Chinese export data, that has seen participants that were short look to cover their positions," said George Adcock, senior metals and macro analyst at broker Marex Spectron in London.
Traders are expected look for a continuation of recent strength in data from China when the HSBC Chinese flash manufacturing PMI is released on Wednesday.
"If this is the case, and the short-covering is to continue, our favoured metals, in terms of positioning, would be nickel and copper," he added.
Copper prices have found support ahead of a seasonally stronger period for demand in top consumer China, but growth concerns are likely to resurface and curb potential gains, said analyst Tim Radford at Sydney-based adviser Rivkin.
RUSAL CUTS NOT ENOUGH
The dollar held largely steady against a basket of currencies. A stronger dollar makes commodities priced in the U.S. unit more expensive for holders of other currencies.
U.S. hedge funds and money managers sharply added bullish bets in copper futures and options, switching the market into its first net longs since February, data from the Commodity Futures Trading Commission showed.
Investors are likely to focus on results from mining firms this week, with Glencore Xstrata expected to write down the value of assets inherited from Xstrata by as much as $7 billion when it reports first-half earnings on Tuesday.
BHP Billiton will also report on Tuesday.
Rusal, the world's largest aluminium producer, said it would cut aluminium output by 357,000 tonnes, or around 8.5 percent of production, more than previously planned cuts of 7 percent.
"Production cuts have started to emerge, with Rusal announcing further curtailments today, however the market is nevertheless still in surplus with further production cutbacks necessary," analyst Leon Westgate at Standard Bank in London said in a note.
Aluminium gave up 1.5 percent to close at $1,916 a tonne, after turning back from heavy resistance at its 200-day moving average at $1,948, traders said.
In Indonesia, refined tin shipments from the world's top exporter dropped to an 11-month low in July, with uncertainty over a series of new regulations likely to crimp overseas sales further in the next few months.
The prospects for thinner supplies helped tin limit losses. It failed to trade in closing open outcry activity, but tin was last bid at $21,850 a tonnes, down 0.3 percent from Friday.
Nickel, which like aluminium is weighed down by global overproduction and surplus supplies, dropped 1.2 percent to finish at $14,810 a tonne.
Lead was barely changed, edging down 50 cents, less than 0.1 percent, to end at $2,250 a tonne and zinc lost 1.0 percent to $1,988.50.