RTRS:METALS-Copper eases from 7-month high as supply surplus looms
* LME copper falls on expectations of higher supply
* Chinese growth worry weighs on base metal prices
By Susan Thomas and Naveen Thukral
LONDON/SINGAPORE, Jan 3 (Reuters) - Copper fell on Friday, easing from a seven-month high as expectations of higher supplies and concerns over Chinese growth weighed on the market.
Three-month copper on the London Metal Exchange was $7,340 a tonne by 1044 GMT, after reaching its highest since June 5 at $7,460 on Thursday.
Copper has gained support from a lack of readily available refined metal due to falling exchange stocks. But ample copper concentrate seen flowing into the market this year will result in swelling supplies.
"We've been saying for a long time that the copper market is still in deficit. The fall in stock piles that has taken place sine June is very substantial, it demonstrates that there is a lack of copper out there at the minute," Natixis analyst Nic Brown said.
"So it's not unreasonable for the market to be pricing some sort of short-term physical scarcity. It's a different question as we go into 2014. Our view is that yes we will move from deficit to surplus this year, we think there is a decent amount of new supply coming on stream."
Copper fell 7.2 percent in 2013 although it gained more than 4 percent in December, posting its biggest monthly rise since September 2012.
Copper stocks in LME-monitored warehouses are at the lowest level since January 2013.
But a survey showing China's factory activity expanded at the slowest pace in three months in December, weighed down by shrinking export orders, restrained copper on Friday.
Signs of an improving global economy have underpinned copper but China's growth is key for the market as the country accounts for 40 percent of the global demand for refined copper.
U.S. factory activity held near a 2-1/2-year high in December and the number of Americans filing new claims for jobless benefits fell again last week, suggesting the economy was poised for stronger growth in 2014.
Investors in the industrial metals market will be watching a spate of speeches from top Federal Reserve policy makers, including outgoing Chairman Ben Bernanke, later on Friday. Any comments on the outlook for tapering could affect market sentiment.
