* Copper faces biggest weekly loss since early June
* Despite dip, aluminium set to close on strongest rally in
* Coming Up: U Michigan preliminary sentiment for July at
(Updates with official prices)
By Alexandra Reza
LONDON, July 18 Copper remained weak on Friday
as prices sank to a two-week low, depressed by concerns about
the Chinese property sector and news of increased production.
In official rings, copper was down 0.6 percent at
$7,025 a tonne, having touched a session low of $7,005.25, its
weakest since July 2. Copper has dropped more than 1.5 percent
this week, heading for its biggest weekly loss in six.
An expected surplus in the second half of this year has also
driven price concerns. Evidence of plentiful supplies emerged on
Friday when data showed weekly copper inventories in Shanghai
warehouses rose by 28.9 percent.
This rise follows several companies increasing their
guidance this week. On Wednesday Rio Tinto
increased full year production guidance for copper. Anglo
American Plc also reported higher copper output for the
first half of the year.
The increase comes despite supply-side setbacks this year
leading producers including Indonesia, Zambia and Chile.
"Given this wide range of problems on the supply side, one
might have expected global copper supplies to have dropped quite
sharply," Nic Brown, head of commodities research at Natixis,
told the Reuters Global Base Metals Forum.
"It is testament to the strength of the new pipeline of
supply that mine output in the year to date has probably risen
by 4 percent or more (year on year)."
China's Huatong Road & Bridge Group said on Wednesday that
it might not be able to repay a $65 million debt due next week,
possibly becoming the first borrower to default in the country's
largest bond market.
"We are increasingly worried about China's property market.
New dwelling commencements are down 18.6 year on year in the
first five months, the sharpest decline since 2009," said
analyst Matt Fusarelli of AME Group.
In the United States, housing starts and building permits
unexpectedly fell in June, suggesting the housing market
recovery was struggling.
Aluminium traded at $1,978 a tonne in official
rings, down 0.6 percent following a strong rally over five
consecutive sessions this week. The metal touched a 16-month
peak on Wednesday at $1,993 a tonne.
Nickel, untraded in official rings, was bid at
$18,600 a tonne, down 3.1 percent. Traders were downbeat about
its prospects given rising stocks and a 38 percent gain already
Also untraded in official rings, lead was bid at
$2,192 a tonne, up 0.1 percent.
Tin drifted down 0.1 percent from Wednesday's last
bid to $22,080 a tonne. Zinc was down 0.3 percent to
$2,295 a tonne.
The focus next week will be on a flash reading of China's
manufacturing health, as well as U.S. inflation, new home sales
and durable goods orders.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin
(Additional reporting by Melanie Burton in Sydney; Editing by
William Hardy and David Evans)