China demand worries drive copper price to one-week low

LONDON, June 13 (Reuters) – Copper prices hit one-week lows on Wednesday due to worries about demand in top consumer China that were reinforced by loans data and a firmer dollar, but labour negotiations at the giant Escondida mine in Chile provided some support. Benchmark copper on the London Metal Exchange was down 0.4 percent at $7,193 a tonne at 0939 GMT from an earlier $7,169, its highest since June 6. “Credit indicators out of China were quite weak, fabrication numbers for copper are poor,” said Dan Smith, head of commodities research at Oxford Economics. “But supply risks are still significant, we’re watching Escondida pretty closely.” LOANS: Chinese banks extended 1.15 trillion yuan ($179.6 billion) in net new yuan loans in May, below analysts’ expectations of 1.2 trillion yuan but up slightly from April’s 1.18 trillion yuan. FINANCING: China’s total social financing, a broad measure of credit and liquidity, dropped sharply to 760.8 billion yuan ($118.8 billion) in May from 1.56 trillion yuan in April, central bank data showed on Tuesday. DOLLAR: A firmer U.S. currency makes dollar-denominated commodities more expensive for non-U.S. firms, which could potentially subdue demand. The U.S. Federal Reserve is widely expected to raise rates on Wednesday. Investors will scan the announcement for clues to how many more rises there may be this year. ESCONDIDA: Global miner BHP said it had responded to the latest contract proposal from unionised workers at its Escondida mine, the world’s largest, triggering a new round of talks that could last a month or more. The union’s proposal, filed with the company in early June, included a salary increase of 5 percent and a one-time bonus of $34,000, equivalent to 4 percent of dividends distributed to shareholders. PRICES: Aluminium was down 1.4 percent at $2,270, zinc ceded 0.4 percent to $3,187, lead fell 0.2 percent to $2,471, tin lost 1.4 percent to $20,825 and nickel slipped 0.1 percent to $15,195.