* Copper on track for first annual rise since 2012
* Focus on strong dollar, weak yuan and Toshiba
(Adds closing prices)
By Pratima Desai
LONDON, Dec 29 Copper prices were softer on
Thursday alongside equities in thin holiday trade as markets
fretted about the higher dollar and the potential for a
liquidity crunch in top consumer China.
Benchmark copper on the London Metal Exchange ended
1 percent down at $5,487 a tonne, though still up from last
week's one-month low of $5,419.50.
But copper is on course for a gain of about 17 percent this
year, which would be the first annual rise since 2012, mainly
owing to better than expected demand in China and hopes of
rising demand resulting from U.S. spending on infrastructure.
Much of that increase was because of buying by funds, many
of which have been cutting bets on higher prices in recent
weeks, partly because of the dollar's climb to 14-year highs
against a basket of major currencies.
A higher U.S. currency makes dollar-denominated commodities
more expensive for non-U.S. firms. For China, it means a weaker
yuan, capital outflows, potentially slower economic growth and
liquidity stress in money markets.
"I would be reluctant to over-interpret these markets in
this quiet holiday period, but there are a couple of key
drivers: the strong dollar and stress in China's financial
markets," said Danske Bank analyst Jens Pederson.
Copper broke above $6,000 a tonne in November after Donald
Trump won the U.S. presidential election and boosted hopes of
infrastructure spending and higher consumption.
But the United States accounts for only about 8 percent of
global demand estimated at about 22 million tonnes and focus has
returned to China, which accounts for nearly half.
Also worrying traders was the potential fallout from
Japanese tech-to-nuclear conglomerate Toshiba, shares in which
have slumped since it announced this week that it faces a
potential multibillion-dollar writedown.
"The problem is the potential for contagion into other
equity markets, which inevitably would be felt in commodity
markets," one copper trader said.
Aluminium closed 1.5 percent down at $1,679, zinc
fell 2.3 percent to $2,521, tin rose 0.8 percent
to $21,050 and nickel was up 0.1 percent at $10,120.
Lead lost 2.9 percent to $1,970, having earlier
touched a three-month low at $1,960 as funds cut bets on higher
Three month LME copper
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Three month LME aluminium
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Three month LME zinc
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Three month LME lead
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Three month LME nickel
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Three month LME tin
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(Editing by Mark Potter and David Goodman)