Copper pulls back as economic growth worries return

LONDON: Copper ended two days of gains on Thursday as concerns resurfaced about the health of the global economy and higher U.S. interest rates ahead of a central bank meeting.

Investors widely expect the U.S. Federal Reserve to increase interest rates next week, but future monetary policy remains uncertain.

"What is breaking the advance of metals is the uncertainty about the next Fed meeting and general liquidity in the financial system," said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.

"The next big trade is to sell the dollar and buy commodities, but we need a trigger, which I think will be the next Fed meeting. If they are not too hawkish, that might be the signal for funds to start to be a bit more aggressive in metals."

Copper jumped to its highest in three weeks on Wednesday after a new round of U.S.-China trade tariffs were not as severe as expected, but investors remained wary about the impact on global economic growth and copper lost steam on Thursday.

Benchmark copper on the London Metal Exchange closed  down 0.6 percent at $6,082 a tonne.

Copper has slumped 18 percent since touching a 4-1/2 year peak of $7,348 in June but has recovered 5 percent from a one-year low of $5,773 in August.

* DOLLAR: Metals were supported by a weaker dollar, with the currency sliding to a seven-week low against a basket of major currencies on Thursday.

* ZINC: LME zinc pared gains to end at $2,455 a tonne, a rise of 0.8 percent, after the metal used to galvanise steel touched a two-week high of $2,471.

* ALUMINIUM OUTPUT: Global primary aluminium output edged up by 0.16 percent month on month to 5.485 million tonnes in August, while Chinese production was estimated to have risen by 0.16 percent to 3.12 million tonnes, data showed on Thursday.

* ALUMINIUM: LME aluminium gained 0.8 percent to finish at $2,043 a tonne.

"Investors are awaiting new impetus after the price ended  back at the lower range of the corridor of between $2,000 and $2,200, in which it has been trading since July. High Chinese supply continues to weigh on its price," Commerzbank said in a note.

* NICKEL: LME nickel rose 1 percent to $12,625.

"Speculative positioning is a small but growing short at 5.8 percent of open interest (at the close on Monday), a level not seen since mid-2017," Alastair Munro at broker Marex Spectron said in a note.

* PRICES: Lead shed 1 percent to close at $2,004.50 a tonne while tin added 0.5 percent to $18,960.