November 17, 2014 / 3:23 AM / 4 years ago

METALS-London copper slips from near two-week high as Japan taints mood

* Chinese Oct refined copper output up 13.6 percent at 732,746 T

* U.S. managed money trims net copper shorts-CFTC

* Coming Up: U.S. industrial output Oct at 1415 GMT (Adds detail; updates prices)

By Melanie Burton

SYDNEY, Nov 17 (Reuters) - London copper slipped from its highest level in a fortnight on Monday as news that Japan had surprisingly fallen into recession tainted previously buoyant sentiment following a slew of improving economic signals from the United States.

Japan’s economy unexpectedly slipped into recession in the third quarter, setting the stage for Prime Minister Shinzo Abe to delay an unpopular sales tax hike and call a snap election just two years after he took office.

Slowing global growth could drag on demand for copper, which is expected to stay muted next year as the market swings into surplus for the first year in six.

“Copper looks range-bound for the rest of the year, around the ... $6,600 mark. Supply continues to be a headwind into next year,” said analyst Daniel Morgan at UBS in Sydney.

Three-month copper on the London Metal Exchange climbed to its highest since Nov. 4 at $6,734 a tonne, before trading edging down by 0.3 percent to $6,686 a tonne by 0744 GMT. In the previous session it had gained 0.8 percent.

The most traded January copper contract on the Shanghai Futures Exchange climbed 1 percent to 47,630 yuan ($7,776) a tonne, having also reached a two-week high.

China’s smelters have ramped up output to take advantage of higher processing fees as the past decade’s boom in investment translates into more mine supply.

China’s refined copper output rose 13.6 percent in October from a year before to 732,746 tonnes, data from the statistics bureau showed on Saturday.

Market attention was turning to U.S. industrial output figures later, to see if the economy is keeping up brisk growth after U.S. retailers reported strong sales in October.

China’s bank lending tumbled in October and money supply growth cooled, raising fears of a sharper slowdown in the economy and prompting some economists to urge the government to ratchet up stimulus measures, including cutting interest rates.

China’s metals industry is grappling with tougher credit conditions that are likely to persist and spark consolidation after a portside financing scandal roiled the market, a Trafigura executive said.

Hedge funds and money managers cut their copper shorts, the Commodity Futures Trading Commission said on Friday.


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

1 US dollar = 6.1253 Chinese yuan Reporting by Melanie Burton; Editing by Richard Pullin, Alan Raybould and Sunil Nair

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