Copper falls on stronger $US

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    Copper has seen its biggest weekly drop since mid-January as a stronger US dollar added to long-standing worries over weakening demand growth in China and ample supplies.

    The US dollar rallied, a day after Federal Reserve Chair Janet Yellen said she expected a rate rise in 2015, and after US growth data appeared to support such a move. A strong US dollar makes dollar-priced metals costly for non-US investors.

    Also weighing, data this week showed the biggest fall in China factory activity since the financial crisis coupled with slowing growth in Europe and the United States.

    "There's just a general feeling of pessimism around the market based on China, but now also based on prospects for a US rate hike," said a trader.

    Three-month copper on the London Metal Exchange closed down 0.6 per cent at $US5,023 a tonne, bringing losses for the week to 4.3 per cent. Turnover was light due to holidays in Singapore, and ahead of China holidays next week.

    "We see copper at around $US5,500 (by year-end) but that should be as good as it gets," said Carsten Menke, analyst at Julius Baer.

    "There will be no drop in supply - there might be mine closures here or there but we expect mine production to grow and at the same time we don't see any region in the world that will ramp up demand growth."

    The dour Chinese outlook is spurring hope in some quarters for stronger stimulus from Beijing, but even those hopes are blighted by poor growth prospects in emerging markets.

    Macquarie has slashed its copper price forecasts. The bank sees average prices at $US5,663 for 2015 and $US5,713 for 2016. It cut its fourth-quarter price forecast expectation by 6.8 per cent to $US5,500.

    Aluminium ended down 0.8 per cent at $US1,566.

    It remains under pressure from oversupply, especially from China, but nearer term tightness has emerged, with cash aluminium trading near it narrowest discount versus the three month price since early May.

    Nickel bucked the trend, closing up 0.8 per cent at $US9,975. Data showed a 4,350 tonne decline in available or 'on-warrant' LME stocks to 243,510 tonnes, the lowest since September 2014.

    Zinc closed down 2.6 per cent at $US1,633, lead ended down 1.9 per cent at $US1,665 while tin ended down 0.7 per cent at $US15,960.

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