HANOI: London copper dipped on Friday as a rally that pushed prices to near a 10-year high ran out of steam amid signs of higher supply and weakening demand growth this year.

Three-month copper on the London Metal Exchange fell 0.1% to $9,048.50 a tonne by 0419 GMT. The contract has surged 47% since the beginning of 2020, hitting a 9-1/2-year high of $9,617 a tonne in February.

"We see China's metals demand stabilising over 2021 following the robust and above-expectations growth recorded in 2020," said Fitch Solutions in a note while retaining a bearish view on copper in the next six to nine months.

"We see large, new supply coming online in 2021 and expect minimal disruption from COVID-19 in 2021. Key projects across the region in Chile, Peru, Panama and even Ecuador are ramping up, while US production will recover," the note said.

Yangshan copper premium fell to $68 a tonne, its lowest since Jan. 15, indicating weaker demand from top consumer China, while inventories have been rising in both LME and ShFE warehouses.

The premium of LME cash copper over the three-month contract fell to $11.50 a tonne, its lowest since Feb. 11, suggesting that the nearby supply tightness has eased.

Meanwhile, China's major copper smelters raised cathode output by 3.3% month on month in February to 745,100 tonnes, research house Antaike said.

The most-traded May copper contract on the Shanghai Futures Exchange advanced 0.8% to 66,930 yuan ($10,318.51) a tonne, tracking overnight gain in London.