Copper holds near three-week low

Copper prices steadied near three-week lows on Thursday as investors kept a wary eye on a trade dispute between Washington and Beijing that could reduce demand for metals in China, the world's largest consumer.
The metal used in power and construction is down nearly 8 percent from a more than four-year high in early June. Fears of a full-blown trade war with the United States have magnified concerns about China's economic outlook following weaker-than-expected growth data for May.
Benchmark copper on the London Metal Exchange closed up 0.2 percent at $6,786 a tonne, after five days of falls took it to a low of $6,772 on Wednesday.
But copper was likely to slip further, said Capital Economics analyst Caroline Bain.
"We have a long-haul view that China is slowing in the second half of this year ... so there is a fundamental reason for weak copper prices," she said.
"A lot depends on the news coming out of the US and China on their trade dispute. Any further escalation in the tension will likely send copper prices lower."
The cancellation of 14,225 tonnes of copper in LME-registered warehouses pushed on-warrant stocks available to the market down to 252,375 tonnes. However, this is up around 20,000 tonnes from the start of June, signalling good supply.
The global refined copper market had a surplus of 55,000 tonnes in March and 87,000 tonnes in February, the International Copper Study Group said. Chinese data, meanwhile, showed refined copper output rose 15.5 percent in May from a year earlier.
Metals were under pressure from the dollar which has rallied to its highest in nearly a year, making dollar-priced metals more expensive for buyers using other currencies.
Speculative positioning in LME copper was now neutral, brokers Marex Spectron said, adding that technical support was around copper's May lows at $6,710-$6,730.
In a bid to keep growth steady, China will use targeted cuts in banks' reserve requirement ratios and other policy tools to boost credit support for small firms, state radio quoted a cabinet meeting as saying.
A government panel cleared 23 of 27 Philippine mines that were assessed for compliance with state regulations, easing uncertainty about potential supply disruptions at the world's No. 2 nickel ore supplier.
LME nickel finished up 0.1 percent at $14,990 a tonne, aluminium ended 0.6 percent higher at $2,179, zinc lost 2.6 percent to $2,917, lead closed 1.1 percent lower at $2,375 and tin shed 0.9 percent to $20,500.