METALS-Copper falls on worries of hurt U.S. economy, China demand
* Investors wary ahead of delayed U.S. economic data
* LME aluminium stocks surge amid market surplus
* Rusal cuts costs after output reductions
(Updates prices, adds detail)
LONDON, Oct 17 (Reuters) - Copper slipped on Thursday from a two-week high despite a last-minute deal to avert a default on U.S. debt as investors remained cautious ahead of delayed U.S. data that could show damage from the government's two-week shutdown.
The wary stance of investors showed up in three-month copper on the London Metal Exchange, which lost 0.65 percent to $7,212.5 a tonne at 1412 GMT, retreating from a two-week peak of $7,299.75 touched on Wednesday and again in early activity on Thursday.
Copper has shed 9 percent so far this year.
"On a day when you have a deal on the U.S. debt ceiling, you would expect a relief rally, but investors appear cautious about getting back into positions ahead of all the delayed U.S. economic data," said analyst Myrto Sokou at broker Sucden Financial in London.
Data on the U.S. economy, including jobs numbers, have been on hold during the government shutdown.
Economists earlier cut their U.S. growth forecasts to 2.3 percent from 2.5 percent year-on-year, in a Reuters poll conducted from October 11 until this Wednesday. But growth could come in even lower than that after the government closure lasted longer than the expected week.
"Also, the fundamentals in the copper market are not supportive at the moment," Sokou added.
Investors this week were reminded of a wave of increased copper output hitting the market when Rio Tinto posted a 23 percent jump in mined copper output in the third quarter and boosted its forecast for full-year production.
Demand may also be soft towards the end of the year.
"Demand generally is better than the same period of last year, but when the winter starts in China, from late November in the north, there's seasonal impact on demand," said analyst Chunlan Li at consultancy CRU in Beijing.
Copper is likely to move lower over the coming two weeks, touching $7,000 or as low as $6,900 a tonne, said T-Commodity consultant Gianclaudio Torlizzi.
"The thing is that $7,300 has proved to be strong resistance, too strong for the time being to be surpassed," he said.
"We expect that copper will produce a double bottom between end of October or the beginning of November before moving higher again," he said, referring to a formation based on chart signals.
ALUMINIUM STOCKS SPIKE
Aluminium prices fell after data showed LME inventories <MALSTX-TOTAL> surged by 82,025 tonnes to 5.4 million tonnes, within a whisker of a fresh record high, providing more evidence of an oversupplied market.
LME aluminium, which has lost 11 percent this year, shed 0.6 percent to $1,845 per tonne in official trading.
Aluminium producers have been hit hard by low prices and the world's biggest aluminium producer Rusal said its output reduction programme had allowed it to save $40 per tonne on the cash cost of aluminium.
"Need for further capacity curtailments and high inventory overhang in the system has led us to cut our 2014 price forecasts to $2,000/t from $2,100/t," said Andrew Keen, global head of metals and mining at HSBC in London, in a note.
In other metals, zinc fell 0.1 percent to $1,925 and nickel dropped 0.8 percent to $14,007.
Tin lost 0.9 percent to $22,800, while lead was flat at $2,165.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin
(Editing by James Jukwey)