AB: Copper at 1 week low on China tightening fears
* China power cuts seen curbing copper demand
* China's SRB launches aluminium sale tender
LONDON, Nov 16 - Copper prices fell to one-week lows on Tuesday, weighed down by worries over plans by China to cool its overheated economy and as the top metals user again demonstrated its willingness to sell metals back to the market.
Benchmark copper on the London Metal Exchange traded at $8,470 in official rings, down from a close of $8,645 on Monday. The metal used in power and construction descended to a little more than five percent from recent record highs at $8,966 a tonne.
China's State Reserves Bureau, which stockpiled a range of base metals in the first half of 2009, announced a tender for aluminium sales, on the heels of similar tenders for zinc and lead.
The SRB will offer 117,000 tonnes of aluminium ingots for sale at auctions on Nov. 23-24. It follows a previous auction of 96,000 tonnes of aluminium from state reserves on Nov. 1-2.
Daniel Major, analyst with RBS, said the tender showed China's commitment to keeping a lid on inflation across the spectrum of assets, including metals.
"(Interest rate) Hikes have the potential to cause sales from private sector (metal) holdings because they raise the opportunity costs of holding non-yielding assets like commodities... while sales into the market should put downwards pressure on pricing."
The euro was close to its lowest in nearly seven weeks versus the dollar as Irish debt problems knocked sentiment, although the U.S. currency was off its highs.
A robust dollar makes metals more expensive for holders of other currencies.
In economic news that could impact metals via currencies later, U.S. October Producer Price Index data were due at 1330 GMT, followed by October industrial production, and a housing sector index at 1415 GMT.
POWER CUTS
Power shortages in China have curbed demand for copper, and in regional areas, copper processors are operating at only low capacity, which has softened otherwise robust demand, Europe's top copper products maker Aurubis said in a note.
"If the situation eases, the international copper market will have to accommodate an increase in demand for refined copper and imports will rise again," it said.
China said it would impose new guidelines to limit electricity use from next year, extending its energy savings campaign following a recent drive to reach targets that resulted in power cuts to small industries and smelters.
State-backed research firm Antaike said early this month that China is likely to have a deficit of 2.44 million tonnes of refined metal next year, larger than the 2.25 million tonne shortfall expected this year.
The global market for refined copper is seen at about 19 million tonnes this year.
Tightness continues in nearby copper prices, reflecting scarcity of nearby supply, highlighted by a strike in Chile. The premium for cash material jumped to $25.50 against the benchmark contract, the highest in over two years.
A strike continues at Chile's Collahuasi, the world's No. 3 copper mine for a 12th day.
LME aluminium saw a large 47,000-tonne increase into LME-bonded warehouses as metal was delivered against short futures positions. Aluminium traded in official rings at $2,356, down from the $2,400 close.
Stainless steel metal nickel which fell to a two-month low on Monday under $22,000, was at $22,225 a tonne, down from $22,350. Global miner Xstrata will restart its Sinclair nickel mine as the economy picks up. Zinc was untraded but quoted at $2,270 having tumbled almost 10 percent since Thursday. Traders said that premiums for material for immediate delivery flared up to $20 as traders who had been long scrambled to find metal.
Losses were less pronounced in battery material lead which fell to $2,403 from $2,455.
Tin sank further to $25,125 from $25,900.
Metal Prices at 1317 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Percent Move End 2009 Ytd Percent
move COMEX Cu 385.10 -7.40 -1.89 334.65 15.08 LME Alum 2356.00 -44.00 -1.83 2230.00 5.65 LME Cu 8465.00 -180.00 -2.08 7375.00 14.78 LME Lead 2403.00 -52.00 -2.12 2432.00 -1.19 LME Nickel 22225.00 -125.00 -0.56 18525.00 19.97 LME Tin 25125.00 -775.00 -2.99 16950.00 48.23 LME Zinc 2270.00 -68.00 -2.91 2560.00 -11.33 SHFE Alu 16655.00 -140.00 -0.83 17160.00 -2.94 SHFE Cu* 64310.00 -620.00 -0.95 59900.00 7.36 SHFE Zin 18255.00 -450.00 -2.41 21195.00 -13.87 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
