* U.S. data mixed, but Fed still seen curbing stimulus
* Copper stocks reverse trend, rise on LME and in Shanghai
* All base metals hit multi-week lows
By Maytaal Angel and Eric Onstad
LONDON, Aug 30 Copper fell to a three-week low
on Friday, pressured by a stronger dollar and expectations that
U.S. stimulus would be withdrawn starting next month, which
could hamper growth and crimp the flow of money invested in
The metal closed the week down 3.5 percent, the biggest
weekly loss since mid-June. For the month, however, it still
notched up its biggest gain since May.
Copper has rebounded 3.2 percent in August on signs of a
stabilising global economy, in particular top metals consumer
China, but the market faces headwinds going into September.
"We've had some encouraging economic data especially out of
China, but our feeling is that copper has peaked and will now
edge lower. We see looming surplus building in the second half
and the Fed tapering will probably see some speculative selling
of commodities," said Robin Bhar, an analyst at Societe
Three-month copper on the London Metal Exchange shed
0.8 percent to close at $7,095 a tonne, after hitting a session
low of $7,081.50, the weakest since Aug. 8.
U.S. economic data recently has been mixed, but most
analysts still expect the Fed to start trimming its $85 billion
in monthly bond purchases next month.
The case for Fed tapering of monetary stimulus was bolstered
on Thursday by positive U.S. growth and jobless claims data, but
a cautionary note came on Friday with data showing U.S. consumer
spending barely rose.
Also weighing on metals was a dollar index that
hovered near a four-week high. A stronger U.S. currency makes
dollar-priced metals costlier for European and other non-U.S.
U.S. officials suggested President Barack Obama would be
willing to proceed with limited military action against Syria
even without specific promises of allied support, notably from
Britain. The political uncertainty was also denting appetite for
risky assets such as copper.
OTHER METALS ALSO SLIDE
Aluminium, zinc and nickel all followed copper to three-week
lows, while tin touched the weakest in nearly four weeks, and
lead hit its lowest in 2-1/2 weeks.
Weighing on copper, data showed stocks in Shanghai Futures
Exchange (SHFE) warehouses rose 0.3 percent from last Friday,
while daily LME data showed a 10,325 tonne rise in copper stocks
The rises interrupted a stocks downtrend in place on the LME
and SHFE since June.
Also, Chinese buyers may cut previously booked LME refined
copper stocks over coming months as arrivals into the world's
top consumer of the metal have built up inventories and weighed
on spot premiums, traders said on Friday.
On the upside for copper, however, China's factory activity
in August may have expanded at the fastest pace in three months,
a Reuters poll showed, adding to evidence that the world's
second-largest economy may be stabilising.
China accounts for about 40 percent of global copper demand.
"Going into the fourth quarter we usually see a bit of
restocking demand from China. We're not expecting a huge
recovery in the copper market, but prices could come back up to
$7,500," said commodity analyst Natalie Rampono of ANZ in
Aluminum Corp of China Ltd (Chalco), the country's top
aluminium producer, posted a first-half net loss of 623.8
million yuan ($101.9 million), hurt by lower prices and
oversupply in the world's top producer and consumer of the
Aluminium failed to trade in closing open outcry
activity, but was last bid at $1,813 a tonne, down 1.2 percent
"Aluminum looks quite poor on the charts in that a good
portion of August's gain has been relinquished in a matter of
days," analyst Edward Meir at INTL FCStone said in a note.
"The earlier lows of $1,770 are now back in play in terms of
being the next downside target."
Zinc slid 1.6 percent to finish at $1,905 a tonne,
while lead lost 2.0 percent to $2,151.50.
Tin gave up 0.8 percent to $21,225 a tonne, while
nickel fell 1.9 percent at $13,800.