* China GDP grows 7.8 pct in Q3, matching forecast
* 2014 outlook bearish on China restructuring, US shutdown
* Bosnia plans to help Aluminij Mostar smelter
* Indonesia takes steps to nationalise Inalum
By Freya Berry
LONDON, Oct 18 Copper prices rose slightly on
Friday, supported by data showing China's economy had expanded
as forecast in the third quarter, although concerns that the
faster growth may be temporary limited gains.
China's economy grew 7.8 percent in the third quarter, its
fastest pace this year, as strengthening foreign and domestic
demand helped factory production and retail sales.
China is the biggest consumer of copper, accounting for 40
percent of world demand.
Benchmark three-month copper on the London Metal Exchange
edged up 0.2 percent to close ring trading at $7,245 a
"The Chinese data was broadly positive, and we've seen a bit
more of a risk-on kind of move," Tom Kendall, an analyst at
Credit Suisse said. "The market is already starting to price in
the fact that demand in China has been fairly robust."
But with Beijing now favouring consumption over production
in its drive for sustainable growth, analysts warned that China
may not soak up so much copper in future, as it shifts down a
gear from decades of double-digit expansion.
"I haven't really changed my bearish view for 2014 and 2015,
because we expect China's industrial production growth to slow
as the growth becomes less investment-driven," said Helen Lau,
senior metals analyst at UOB Kay Hian Securities in Hong Kong.
China's copper imports jumped 18 percent from August to hit
an 18-month high in September as end-users rebuilt inventories,
although analysts said the chances of that momentum being
sustained were slim.
On the supply side, analysts forecast copper surpluses on
increased mine production. Earlier this week Rio Tinto
posted a 23 percent jump in third-quarter mined copper output.
"We see supply growth outrunning demand growth," Kendall
said, putting average 2014 prices at $6,625.
Concerns also remained over the United States, where federal
agencies reopened on Thursday after the government managed to
pass a deal to end a shutdown and raise the debt ceiling.
Economists warned that the impasse will have taken a 0.1
percent chunk out of growth for each week that the 16-day
In the aluminium market, Bosnia's regional government has
proposed to help smelter Aluminij Mostar settle a debt
to the state-run power utility and stave off closure. The
company is struggling with a metal surplus and high power
Meanwhile, Indonesia plans to buy out the Japanese
shareholders of PT Indonesia Asahan Aluminium (Inalum), a
government minister said, avoiding a legal dispute and laying
the ground for nationalisation.
Aluminium closed trading down 0.2 percent to $1,847
In other metals, zinc firmed up 0.1 percent to close
at $1,934 per tonne, and lead ended flat at $2,175.5 per
tonne. Tin lost 0.2 percent to finish at $22,705.
Nickel hit a near-month high, closing trading up
1.4 percent to $14,200, in the latest sign that the year's
worst-performing base metal may be bottoming out.