Copper hits over one-week low as oil rally, strong dollar weigh

Sept 28 (Reuters) - Copper fell to its lowest in more than a week on Monday, as rising oil prices after the US' rejection of Iran's peace deal and a strong US dollar weighed on the industrial metals complex.

Benchmark three-month copper on the London Metal Exchange fell 1.42% to $14,415 a metric ton by 0310 GMT. It dropped as low as $14,389.50 earlier in the session — its lowest since September 17 and its steepest fall since September 14.

The most-traded copper contract on the Shanghai Futures Exchange dropped 0.70% to close at 109,440 yuan ($16,297.11) a ton. It had dropped as much as 0.91% earlier, its steepest decline since September 15, to 109,210 yuan, its lowest level in 10 days.

Brent crude rose more than 2% on Monday after US President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz and end the conflict, keeping alive concerns over disruptions to oil flows through the key waterway.

The US dollar hovered near a two-month high. A stronger dollar makes greenback-priced metals more expensive for holders of other currencies.

In China, industrial profit growth slowed to 4.2% year-on-year in August from 11.2% in July, official data showed on Monday. Profits rose 15.7% in the first eight months, easing from 17.6% in January-July.

Downstream users are expected to restock ahead of China's seven-day National Day holiday this week, but elevated spot premiums and high copper prices may curb demand, Jinrui Futures said.

Domestic copper premium stood at 1,315 yuan a ton as of Thursday before the Mid-Autumn Festival holiday, just below a weekly peak of 1,375 yuan.

Among other LME metals, aluminium fell 1.27%, zinc dropped 1.51%, lead lost 0.91%, nickel slipped 0.82% and tin fell 1.84%.

On the SHFE, aluminium fell 1.20%, zinc dropped 0.92%, lead lost 0.58%, nickel declined 1.12% and tin shed 0.85%.

($1 = 6.7153 Chinese yuan renminbi)