Copper slips after China data disappoints and dollar gains

LONDON, Feb 28 (Reuters) – Copper touched a two-week low on Wednesday as the dollar advanced on the prospects of higher interest rates and growth in China’s manufacturing sector slowed in February. Benchmark copper on the London Metal Exchange edged 0.5 percent lower to $6,988 per tonne in official trading rings, after a session low of $6,975.  “Part of the reason (for the weakness in copper) is the Chinese data which came in weaker than expected,” said FOREX.com analyst Fawad Razaqzada. “When manufacturers are not as optimistic as before, that tends to weigh on demand expectation for metals and other commodities in general.” But analysts said the dip in copper, used in power and construction, was most likely short-lived.  “Copper is in an uptrend and the moves lower have been choppy affairs, making it seem likely that these are corrective drops, nothing more,” said Marex Spectron’s Alastair Munro. USD: The dollar stood near a three-week high against a basket of currencies on Wednesday after Fed Chairman Powell’s upbeat views on the U.S. economy bolstered bets on further interest rate hikes this year. A stronger dollar makes metals more expensive for holders of other currencies, weighing on prices. CHINA: Growth in China’s manufacturing sector in February slowed more than expected to the weakest in over 1-1/2 years as Lunar New Year holidays disrupted business activity and tougher pollution rules curtailed factory output. China is the world’s top metals consumer and its manufacturing sector is often seen as the main bellwether for base metals demand. SUPPLY CUTS: Norwegian aluminium-maker Hydro is preparing to cut output from Brazil’s Alunorte alumina refinery by 50 percent from March 1, as ordered by an environmental regulator. ALUMINIUM: The U.S. Commerce Department said on Tuesday it had made a final determination that imports of aluminium foil from China are being sold in the United States at less than fair value and producers are benefiting from subsidies from Beijing. PRICES: Aluminium was bid down 0.5 percent to $2,137 per tonne. Analysts said the metal had found technical support around $2,140 in the last few sessions. LEAD INFLOWS: Lead inventories jumped 12 percent by 12,925 tonnes to 125,800 tonnes on Wednesday after falling to their lowest since August 2009. LME LEAD: Lead was the biggest decliner on the exchange, with a bid at $2,532 per tonne, representing a 1.7 percent fall. OTHER METALS: Tin shed 0.5 percent to $21,605, zinc dipped 0.8 percent to $3,459 while nickel was largely flat at $13,830.