* Macquarie cuts Q4 copper price forecast by 6.8 pct to $5,500 * Coming Up: US Final Q2 GDP at 1230 GMT (Adds official midday prices) By Maytaal Angel LONDON, Sept 25 (Reuters) - Copper steadied on Friday as stronger oil prices and equity markets spurred bargain hunting, but the metal was set for its biggest weekly drop in two months on worries over weakening demand growth in top consumer China and ample supplies. European shares bounced back from losses in the previous session while oil markets rose, making commodity basket funds that include copper more attractive for investors. But sentiment remained downbeat after new signs of a slowdown in China emerged this week. Also, increased prospects of a U.S. interest rate rise have boosted the dollar, making dollar-priced metals costly for non-U.S. investors. "We see copper at around $5,500 (by year-end) but that should be as good as it gets," said Carsten Menke, analyst at Julius Baer. "There will be no drop in supply - there might be mine closures here or there but we expect mine production to grow and at the same time we don't see any region in the world that will ramp up demand growth." Three-month copper on the London Metal Exchange traded up 0.4 percent to $5,070 a tonne in official midday rings, after falling to a four-week trough of $5,013.50 on Thursday. The metal was set for a 3.5 percent drop this week, the largest since the second half of July. Turnover was light due to holidays in Singapore, and ahead of China holidays next week. Data this week showed the biggest fall in China factory activity since the financial crisis, coupled with slow growth in Europe and the United States. Some analysts see the Chinese outlook spurring stronger government stimulus, but even that view is blighted by poor prospects elsewhere. "We feel slightly more comfortable that Chinese demand may have hit a cyclical low. However, ex-China emerging markets are becoming a bigger concern for future demand. As such, further downside risk to global demand remains," said Macquarie. The bank sees average copper prices at $5,663 for 2015 and $5,713 for 2016. It cut its fourth-quarter price forecast expectation by 6.8 percent to $5,500. Aluminium traded down 0.1 percent in rings at $1,577 a tonne. It remains under pressure from oversupply, especially from China, but nearer term tightness has emerged, with cash aluminium trading near it narrowest discount versus the three month price CMAL0-3 since early May. LME nickel was last bid down 0.25 percent at $9,875, though losses were limited by a 4,350 tonne decline in available or 'on-warrant' LME stocks to 243,510 tonnes, the lowest since September 2014. Zinc was last bid down 1 percent at $1,661, lead was last bid down 0.5 percent at $1,689 while tin traded down 0.8 percent at $15,075.

Source