METALS-Copper slips but heads for second straight yearly rise

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By Ashitha Shivaprasad

Dec 31 (Reuters) - Copper prices fell on Tuesday but were on track for a second consecutive yearly gain, while the red metal's outlook for next year hinges on China's economic recovery and U.S. President-elect Donald Trump's policies.

Three-month copper on the London Metal Exchange (LME) was down 0.9% at $8,830 per metric ton by 1255 GMT. It has gained 3.2% so far for the year.

"Supply setbacks at global mines contributed to a tightening in global copper market... On the demand side, industrial recovery in key economies, alongside demand from the green energy transition, helped support prices," said Aneeka Gupta, director of macroeconomic research at WisdomTree.

In May, copper prices scaled a historic high of $11,104.50, fuelled by a fund-buying frenzy. But, since then, prices have fallen 20% — pressured by a strong dollar, import tariff threats and persistent doubts over China's recovery. USD/

China, the biggest commodity consumer, has struggled to recover amid weak consumption and a protracted property crisis. However, policymakers hope a recent blitz of fiscal and monetary measures will spark a turnaround.

Meanwhile, Trump threatened tariffs in excess of 60% on Chinese goods during his campaign.

"Uncertainty around the scope and fallout of any possible trade wars under the incoming Trump administration could cast a cloud over industrial metals demand," said Tim Waterer, chief market analyst at KCM Trade.

"If 2025 sees a continuation of the Chinese economic malaise, this could be a headwind for the copper price."

LME aluminium CMAl3 dipped 0.3% at $2,542.50 a ton but rose 6.5% this year, aided by a raw material shortage. Prices of alumina, the main ingredient for making primary aluminium, rallied this year due to supply disruptions.

LME zinc CMZN3 dropped 0.7% to $2,997, but rose 12.6% for the year. Tin CMSN3 fell 0.6% to $29,105 and were set to register an annual gain of 14.6%.

LME nickel CMNI3 lost 0.5% at $15,340, while lead CMPB3 was 0.3% higher at $1,952.50. The metals were poised for annual losses of 7.5% and 5.5%, respectively.

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(Reporting by Ashitha Shivaprasad in Bengaluru and additional reporting to Sherin Elizabeth Varghese; Editing by Vijay Kishore)

((Ashitha.Shivaprasad@thomsonreuters.com;))

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