* Some Chinese banks tripled writeoffs on bad loans
* U.S. Fed still expected to delay tapering stimulus
* Loose Fed policy whets appetite for aluminium financing
LONDON, Oct 23 (Reuters) - Copper fell more than 1.5 percent on Wednesday as fears of tighter monetary policy in top metals user China outweighed speculation that tepid U.S. jobs data will deter the Federal Reserve from tapering its stimulus this year.
Some of China's big banks were tripling writeoffs on bad loans, according to reports. Short-term Chinese money rates surged on the policy concerns.
China consumes about 40 percent of the world's copper.
Copper hit a one-month high on Tuesday after the first U.S. jobs report since the partial government shutdown suggested that the economy had lost steam, supporting expectations that the Federal Reserve will delay tapering its stimulus programme.
Nine of 15 U.S. primary dealers surveyed by Reuters on Tuesday now expect the Fed to begin slowing its $85 billion-a-month bond-buying programme in March.
"The fed tapering (delay), the global economy strengthening slowly - these factors help solidify the (copper price) floor, but what is the bullish trigger to break out of the range? I don't see it," Societe Generale analyst Robin Bhar said.
"There's more supply coming through. Is China going to be aggressively pushing its economy forward, the answer is no, (so)more rangebound trading will continue to the year end at least."
Benchmark three-month copper on the London Metal Exchange traded down 1.61 percent at $7,215 a tonne in official midday rings, eroding the previous session's 1.2 percent gain.
Copper prices hit the highest since Sept. 20 on Tuesday at $7,350 a tonne but have been in a broader $7,000-$7,420 band since early August.
While the prospect of extended U.S. monetary stimulus is supportive for metals, sluggish U.S. growth is doing little to improve copper's demand outlook amid rising supply. The market is seen in a surplus both this year and next.
Bond buying helps to prop up commodities by allowing greater liquidity for both business and investors, while weakening the dollar, which makes dollar-priced commodities less expensive for holders of other currencies.
The U.S. currency tentatively steadied near a two-year low versus the euro on Wednesday after its latest slide.
Back in China, concern was raised on Tuesday that ample credit could fuel inflation as a report showed house prices jumped the most in nearly three years.
On the positive side for copper, worries of a credit crunch if the government tries to clamp down on soaring house prices have fuelled financing demand for the metal. Chinese investors who buy copper as collateral for short-term loans have started using LME stocks for the practice.
In other metals traded, packaging metal aluminum fell 0.53 percent to $1,869 a tonne, having hit its highest since late August on Tuesday.
Shares of top aluminum producer Alcoa Inc made their biggest one-day move in nearly two years on Tuesday. While the reasons were unclear, there is some speculation that the prospect of delayed tapering of U.S. monetary stimulus has whetted appetite for aluminum financing.
Lead traded down 0.69 percent at $1,948.50 a tonne, zinc was down 1.13 percent at $2,180 a tonne, tin was last bid down 1.19 percent at $22,925 a tonne and nickel fell 1.45 percent to $14,635.
Three month LME copper CMCU3
Most active ShFE copper SCFcv1
Three month LME aluminum CMAL3
Most active ShFE aluminum SAFcv1
Three month LME zinc CMZN3
Most active ShFE zinc SZNcv1
Three month LME lead CMPB3
Most active ShFE lead SPBcv1
Three month LME nickel CMNI3
Three month LME tin CMSN3