Oct 1 (Reuters) - London copper prices rose on Friday but
headed for a weekly decline as investors reduced risk exposure
amid widespread power restrictions in China and a looming debt
crisis at property giant China Evergrande Group.
Three-month copper on the London Metal Exchange rose
0.5% to $8,982.50 a tonne by 0735 GMT, but was set to post a
weekly decline of 3.7%.
"We highlight a sharp rise in risks to our metal price
forecasts as we continue to monitor the situation in China,
especially the two biggest developments being Evergrande's
financial issues and the acute power shortage," Fitch Solutions
said in a note.
China's power shortage has prompted analysts to cut growth
outlook in the world's biggest metals consumer, and its factory
activity unexpectedly shrank in September, partially due to the
"Although the power crisis could have a mixed impact on
supply and demand for commodities, the market is giving more
weightage to the resulting demand losses from slowing economic
growth," said ANZ analysts in a note.
Risk sentiment remained tepid as cash-strapped Evergrande
missing some offshore debt obligations sparked concerns its woes
could spread through the financial system and reverberate around
LME aluminium rose 0.4% to $2,870.50 a tonne, nickel
declined 0.5% to $17,840 a tonne, zinc rose 0.3%
to $2,997 a tonne, and tin dropped 1.2% to $33,505 a
LME lead was almost unchanged at $2,092 a tonne,
hovering near its lowest since April 26 hit in the previous
session of $2,060 a tonne.
Chinese markets were closed on Friday for a week-long public
* Copper production in Chile, the world's top producer of
the metal, dropped 4.6% year-on-year in August amid falling ore
grades and labour strikes at key deposits, government statistics
agency INE said on Thursday.
* ShFE copper inventories <CU-STX-SGH> on Thursday fell to
43,525 tonnes, the lowest since June 2009, cushioning losses in
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(Reporting by Mai Nguyen in Hanoi; Editing by Ramakrishnan M.)