RTRS:METALS-Copper slips, eyeing fifth weekly loss in six
* LME copper off 0.2 pct after China data, ahead of EU
summit
* China inflation, industrial output drop, more easing seen
* Coming Up: EU leaders summit
(Updates prices, adds China industrial output)
By Manolo Serapio Jr
SINGAPORE, Dec 9 (Reuters) - London copper futures
edged lower on Friday, reflecting investor worries about whether
European leaders will find a far-reaching solution to a
two-year-old debt crisis and slowing demand in top consumer
China.
Copper is heading for its fifth weekly drop in six weeks,
and could stretch losses until the end of the year if Friday's
European Union summit fails to yield positive results and more
Chinese data point to weaker growth in the world's
second-largest economy.
China's industrial output growth hit its slowest pace in
more than two years in November and inflation tumbled as
economic conditions deteriorated, raising expectations Beijing
will ease monetary policy again.
A steep fall in producer inflation to 2.7 percent in
November from 5.0 percent in October showed the Chinese economy
cooling off rapidly.
"I'm worried that China's slowing down too fast, that's the
scare factor," said Jonathan Barratt, managing director at
Commodity Broking Services in Sydney.
"It's more of a crisis that's going to develop there if
things slow down too fast. China has been working its domestic
economy to keep it afloat and if that domestic economy shows
signs of drastic weakness then it becomes an issue."
Three-month copper on the London Metal Exchange
eased 0.2 percent to $7,691.25 a tonne by 0710 GMT. For the
week, copper is down 2.5 percent.
The most-active February copper contract on the Shanghai
Futures Exchange dropped 1.4 percent to close at 57,070
yuan per tonne, falling 1.7 percent for the week.
China, which consumes around 40 percent of the world's
copper, has been seen as the remaining pillar for the industrial
metal, with the euro zone engulfed by a debt crisis and the U.S.
economy struggling.
But slower Chinese demand, spurred by tighter credit as
Beijing tames inflation, was partly to blame for copper being
unable to recover strongly.
Copper has fallen 25 percent from this year's record high of
$10,190 reached in February, and is down 20 percent this year,
heading for its first annual loss since 2008 when a financial
crisis tripped the global economy.
With the Chinese economy showing more signs of a slowdown,
Barratt of Commodity Broking Services said he was looking at
another cut in the bank reserve requirement before Christmas
Day.
China shaved the reserve requirement for commercial lenders
on Dec. 5, the first cut in three years.
Outside China, investors are looking to the EU summit in
Brussels. But opposition from Germany and the European Central
Bank, which doused hopes it would boost its bond-buying to help
fight the debt crisis had pushed back market expectations for
big and bold measures from the summit.
"Despite the cloudy picture, we suspect that the Europeans
will come together and provide the markets with 'something' in
the days ahead," INTL FCStone analyst Edward Meir said in a
note.
"Failure is not an option at this stage, as it could lead to
a serious market sell-off and a possible run on the euro and in
sovereign debt markets."
Base metals prices at 0710 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7691.25 -18.75 -0.24 -19.88
SHFE CU FUT FEB2 57070 -790 -1.37 -20.57
LME Alum 2066.50 1.50 +0.07 -16.34
SHFE AL FUT FEB2 16140 -20 -0.12 -4.16
HG COPPER MAR2 349.25 -0.75 -0.21 -21.33
LME Zinc 1990.00 2.00 +0.10 -18.91
SHFE ZN FUT MAR2 15660 -135 -0.85 -19.59
LME Nickel 18147.00 -153.00 -0.84 -26.68
LME Lead 2099.00 -4.00 -0.19 -17.69
SHFE PB FUT 15600 -125 -0.79 -14.99
LME Tin 20200.00 0.00 +0.00 -24.91
LME/Shanghai arb 212
Shanghai and COMEX contracts show most active months
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month
