(Recasts, updates prices, adds market details) LONDON, Nov 15 (Reuters) - Copper fell on Monday as datashowed weakness in China's property sector, Chinese coal pricesplunged, the U.S. dollar strengthened to a 16-month high and asupply squeeze on the London Metal Exchange (LME) continued toease.
China is the biggest consumer and producer of metals. Lesshomebuilding would reduce demand, and lower coal prices shouldreduce energy costs for smelters. Metals are priced in dollars, so the strong greenback makesthem more expensive for buyers with other currencies.
Benchmark copper on the London Metal Exchange (LME)was down 0.7% at $9,640 a tonne at 1746 GMT, having earlierreached $9,773, the highest level since Oct. 27. Prices are still up around 25% this year after rising 26% in2020.
Fears of a slowdown in China are overblown, with thegovernment likely to act if needed to support growth, saidCommerzbank analyst Daniel Briesemann.
He said copper should rally strongly later in the decade asdemand increases and supply runs short. "The copper market willhead into a structural deficit in the next few years but not inthe next few months," he said.
CHINA: While the property sector was weak, China'sindustrial output and retail sales grew more quickly thanexpected in October. SQUEEZE: A supply squeeze in the LME warehouses systemcontinued to ease, with the premium for cash copper over thethree-month contract falling to $32.50 from more than $1,100last month. On-warrant copper stocks in LME warehouses have risen to50,300 tonnes from 14,150 tonnes last month but are still downfrom more than 200,000 tonnes in August. CHINA OUTPUT: China's production of 10 nonferrous metals -including copper, aluminium, lead, zinc and nickel - was 5.26million tonnes in October, up 0.5% from September but down 2.6%year-on-year, the statistics bureau said. METALS PRICES: LME aluminium was down 2.2% at$2,640.50 a tonne, zinc fell 1.7% to $3,213, nickel lost 2% to $19,585, lead slipped 1.8% to$2,318.50 and tin was down 1.3% at $37,350. (Reporting by Peter Hobson in LondonAdditional reporting by Mai Nguyen in HanoiEditing by David Evans and Matthew Lewis)
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