METALS-Copper steady, but China demand fears shackle sentiment

(Updates prices) LONDON, May 9 (Reuters) - Copper prices held steady on Tuesday but came under pressure after data from top consumer China raised concern over weak economic growth and metals demand while rising inventories and a firm dollar reinforced negative sentiment. Benchmark copper on the London Metal Exchange (LME) was up 0.1% at $8,593 a tonne by 1604 GMT. Prices of the industrial metal used as a gauge of economic health have dropped 6% since April 14. "The weaker tone during the second half of April was due mainly to concern about China’s growth prospects," said Marex analyst Edward Meir. China's copper imports in April fell 12.5% from a year earlier because of subdued global demand for China's products and persistent weakness in the country's property market. China's manufacturing activity dipped unexpectedly in April, with softer domestic demand suggesting the sector is losing momentum. "China’s manufacturing data has underwhelmed. The economic recovery is patchy. More policy support is likely if this weakness persists," Citi analysts said in a recent note.

Looking ahead, total social financing and loan data from China over the next few days will be scrutinised closely for clues to future growth and demand prospects. Meanwhile, copper inventories in LME-approved warehouses have climbed 40% to 71,675 tonnes since April 18. Receding concerns about copper availability in the LME system have created a discount for cash copper over the three-month contract . The dollar edged up against major currencies as traders awaited clarity on U.S. debt ceiling talks and new inflation data for a clearer picture of the economic outlook and the Federal Reserve's future strategy on interest rates. A rising U.S. currency makes dollar-denominated metals more expensive for holders of other currencies, which could subdue demand. In other metals, aluminium was little changed at $2,318 a tonne, zinc slipped 0.5% to $2,674, lead added 0.8% to $2,135, tin was down 0.4% at $25,970 and nickel plunged by 4.1% to $23,520. Rising supplies are behind the drop in nickel prices, which are down 25% since early January.
(Reporting by Pratima Desai Editing by Susan Fenton and David Goodman)

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METALS-Copper steady, but China demand fears shackle sentiment

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