* Market jittery ahead of China GDP data due to be weak
* Losses limited as Spain retains investment-grade debt rating
* Dollar index hits 1-month low
* Coming Up: U.S. Sep. housing starts; 1230 GMT
(Updates with official prices)
By Eric Onstad
LONDON, Oct 17 Copper edged lower on Wednesday ahead of Chinese
data expected to show slower growth and amid uncertainty about whether a
European summit will make progress in solving the region's debt crisis.
Three-month copper on the London Metal Exchange fell $5 in official
midday trading to $8,120 a tonne, giving up earlier gains when it touched an
intraday high of $8,182.
The market, sapped of liquidity during LME Week when many participants are
in meetings and attending receptions, has tested the bottom of its recent range
of about $8,100 to $8400 over the past few days.
A two-day European Union summit starts on Thursday, which may focus
attention on disputes over closer fiscal union as a long-term solution to the
euro zone crisis.
"I'm not sure we're any closer to any sort of agreement and with the lower
interest rates on peripheral debt across Europe, the incentive to do something
now is reduced," said Nic Brown, head of commodities research at Natixis in
"It's all simmering along... but it would certainly be a step forward if
Spain did move to request assistance."
Copper found support on its probes to the downside from a weaker dollar and
as news emerged from Moody's Investors Service affirming Spain's investment
The euro's strength pushed the dollar index down to a one-month low, making
dollar-denominated commodities like London copper cheaper for holders of other
Also helping support prices was a report by Kyodo News that Japanese Prime
Minister Yoshihiko Noda plans a new round of economic stimulus by the end of
next month as the country has entered a lull. The report quoted sources close to
the prime minister.
The market was also digesting indications that the copper market would be
better supplied next year from annual talks about premiums and treatment and
refining charges (TC/RCs), Brown said.
The TC/RCs are expected to rise moderately to around $70 per tonne and 7
cents per pound and premiums to fall by about $5 a tonne.
"That's a sign that the copper market is a little bit better supplied with
ores and concentrates going forward, that the market is not quite as tight as
has been over the past year," Brown said.
Signs of better copper supply next year was supported when BHP Billiton, the
world's No.2 copper producer, said copper production in the quarter rose 24
percent from a year ago, with its majority-owned Escondida mine in Chile headed
for a 20 percent production increase in fiscal 2013.
WORRY ABOUT CHINA GDP
In China, the most active January copper contract on the Shanghai Futures
Exchange fell 0.2 percent to close at 58,660 yuan ($9,400) per tonne.
"Shanghai base metals have resisted rising... there has been a feeling of
uncertainty in China ahead of GDP figures tomorrow and the 18th Communist Party
Congress, which made investors more inclined to sell today," the trader added.
Economists polled by Reuters indicated China's annual economic growth
probably slowed for a seventh straight quarter in the July-September period to
expand 7.4 percent, the weakest level since the depths of the global financial
In the physical markets, traders said spot copper demand was still
lacklustre, with the day's spot-to-front-month discount doubling from Tuesday to
as high as 200 yuan.
Broker Marex Spectron noted tightness in aluminium December futures, with
December at a premium of $2.15 over the three month contract CMALZ2-3.
Triland also pointed out the tightness and said in its evening note: "We
recommend to monitor this closely and use eventual contangos to protect against
a situation we had during September this year."
Three-month aluminium rose 0.2 percent to $1,960 per tonne in
official rings. Stocks data showed a large fresh net cancellation of 63,550
tonnes in Antwerp MALSTX-TOTAL.
Galvanizing metal zinc ticked $2 firmer in official trading to
$1,900 a tonne and battery material lead added 0.2 percent to $2,117.
Tin was not traded in official rings, but was bid at $21,230 a
tonne, down 1.3 percent from Tuesday's close, and stainless steel ingredient
nickel fell 0.3 percent to $16,875.
($1 = 6.2640 Chinese yuan)
(Additional reporting by Carrie Ho, editing by William Hardy)