(Updates prices, adds quotes)
Oct 1 (Reuters) - London copper prices rose on Friday but headed for a weekly decline as investors reduced risk exposure amid widespread power restrictions in China and a looming debt crisis at property giant China Evergrande Group.
Three-month copper on the London Metal Exchange rose 0.5% to $8,982.50 a tonne by 0735 GMT, but was set to post a weekly decline of 3.7%.
“We highlight a sharp rise in risks to our metal price forecasts as we continue to monitor the situation in China, especially the two biggest developments being Evergrande’s financial issues and the acute power shortage,” Fitch Solutions said in a note.
China’s power shortage has prompted analysts to cut growth outlook in the world’s biggest metals consumer, and its factory activity unexpectedly shrank in September, partially due to the curbs.
“Although the power crisis could have a mixed impact on supply and demand for commodities, the market is giving more weightage to the resulting demand losses from slowing economic growth,” said ANZ analysts in a note.
Risk sentiment remained tepid as cash-strapped Evergrande missing some offshore debt obligations sparked concerns its woes could spread through the financial system and reverberate around the world.
LME aluminium rose 0.4% to $2,870.50 a tonne, nickel declined 0.5% to $17,840 a tonne, zinc rose 0.3% to $2,997 a tonne, and tin dropped 1.2% to $33,505 a tonne.
LME lead was almost unchanged at $2,092 a tonne, hovering near its lowest since April 26 hit in the previous session of $2,060 a tonne.
Chinese markets were closed on Friday for a week-long public holiday.
* Copper production in Chile, the world’s top producer of the metal, dropped 4.6% year-on-year in August amid falling ore grades and labour strikes at key deposits, government statistics agency INE said on Thursday.
* ShFE copper inventories CU-STX-SGH on Thursday fell to 43,525 tonnes, the lowest since June 2009, cushioning losses in copper prices.
* For the top stories in metals and other news, click or (Reporting by Mai Nguyen in Hanoi; Editing by Ramakrishnan M.)
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