MARKETS-METALS (UPDATE 4) * Antofagasta reports 1Q copper output down 29,000 T * Aurubis sees copper revisiting $10,000/T on strong demand * Coming Up: US ISM Non-Manufacturing for April at 1400 GMT (Adds trader comments, updates with official prices) By Melanie Burton LONDON, May 4 (Reuters) - Copper dropped to a seven-week low on Wednesday as investors, worried that tightening measures in top consumer China would constrict demand, scaled back exposure to commodities. Three-month copper on the London Metal Exchange was untraded in official rings but was quoted at $9,195/9,200, down from Tuesday's close at $9,350 a tonne. The metal used in power and construction earlier hit its lowest since March 15 at $9,155.50 a tonne. Signs of further plans by Beijing to draw in monetary policy, despite manufacturing data that showed its economy is cooling, have reignited worries about a knock-on to copper consumption. "General risk appetite is under pressure at the moment. There are some fears over China - will they tighten too much?" said analyst Arne Lohmann Rasmussen at Danske bank. "We saw the PMI data earlier this week, and it seems like the Chinese economy is cooling down. The base metals will be the first in line to go if that happens, " he said. Chinese inflation will moderate in the second half of the year, China's vice central bank governor was quoted as saying, but Beijing will continue to mop up excess cash. China's central bank said in its quarterly monetary policy report on Tuesday that there was no absolute ceiling on how high cash reserve requirements for Chinese banks may go. Fears of more tightening sent China's main stock index falling 2.2 percent on Wednesday to its lowest in more than two months and European shares also reverted lower. A weaker dollar failed to provide support as risk was cut across markets, traders noted. "The story is China," a ring trader said. "All our guys are worried that China is off the boil. They are worried about rising interest rates, they are worried about slowing demand. Any time copper rises, they sell," he said. "But then the shorts get hit and it flies back up again." COPPER OUTPUT DROPS A series of earnings reports by copper producers and consumers on Wednesday underlined a downward trend in copper output and highlighted expectations by some of another price rise. Anglo-Swiss miner Xstrata reported a 6 percent decline in copper output in the first quarter due to severe weather conditions at its Collahuasi mine in Chile and lower grades at its Alumbrera mine in Argentina. Chilean miner Antofagasta said copper production in the first quarter came in about 29,000 tonnes below initial targets and cut the full-year target for its flagship Los Pelambres mine. Mid-tier producer Kazakhmys PLC also noted a production shortfall of 5 percent to 74,000 tonnes, but said it remained on track to meet the full year target of 300,000 tonnes. Meanwhile, top European copper producer Aurubis expects overall demand for copper to remain strong this year with prices picking up at times again to $10,000 a tonne, a senior manager of the company said. Not everyone in the market was convinced the news painted a scenario for rising prices. "You can read it that it could support prices, but you could also read that even as production levels have fallen and demand has picked up, LME stocks are still going up," a London trader said. Copper stocks hit an 11-month high, the latest data showed, continuing a rise so far in the second quarter, which is typically a strong seasonal quarter for demand. In other metals, aluminium eased back from near three-year highs at $2,769 a tonne from $2,797, underpinned not just by rising input costs but also automotive demand. "Strong US auto sales data provided some additional support for aluminium," noted ANZ. Detroit automakers posted solid U.S. gains in April. Battery material lead was untraded but quoted at $2,496/$2,496.50 from $2,509. Nickel was at $26,800 from $27,325. Tin was at $31,200 from $32,300, while zinc was at $2,225 from $2,245 on the prior day's close. Metal Prices at 1218 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Percent Move End 2010 Ytd Percent move COMEX Cu 416.55 -8.00 -1.88 444.70 -6.33 LME Alum 2769.00 -28.00 -1.00 2470.00 12.11 LME Cu 9195.00 -155.00 -1.66 9600.00 -4.22 LME Lead 2496.00 -13.00 -0.52 2550.00 -2.12 LME Nickel 26750.00 -575.00 -2.10 24750.00 8.08 LME Tin 31200.00 -1100.00 -3.41 26900.00 15.99 LME Zinc 2235.00 -10.00 -0.45 2454.00 -8.92 SHFE Alu 16840.00 5.00 +0.03 16840.00 0.00 SHFE Cu* 67910.00 -1090.00 -1.58 71850.00 -5.48 SHFE Zin 17215.00 -35.00 -0.20 19475.00 -11.60 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

Source