Oct 19, 2012 (Dow Jones) NEW YORK--Copper skidded more than 2% to a six-week low on Friday, pressured by a stronger U.S. Dollar and worry that China's central bank would refrain from deploying new measures to stimulate economic activity in the world's top copper consumer.

The most-actively traded copper contract, for December delivery, fell 10.55 cents, or 2.8%, to settle at $3.6375 a pound on the Comex division of the New York Mercantile Exchange, the lowest price since Sept. 6.

Song Guoqing, an adviser to the People's Bank of China, told a forum in Beijing this week that the central bank is unlikely to take steps to ease monetary policy, because banks are willing to lend. He also said large policy shifts were unlikely ahead of the Chinese leadership transition in November.

The takeaway of the adviser's comments was that "there will not be a big stimulus and that local-government plans will not materialize quickly," Standard Bank analyst Leon Westgate said in a note.

Worries about demand from China, which accounts for about 40% of global copper use, have kept a lid on copper prices at times this year. Beijing this year has relaxed some lending rules and approved infrastructure investments, but analysts say the outlook for copper prices remains tied to how firm a hand policy makers take in propping up the economy.

While readings this week on Chinese industrial production and retail sales exceeded expectations, higher prices for copper and other base metals would "require a more sustained recovery of economic activity" there, analysts with Deutsche Bank said in a note.

European Union leaders agreed on Friday to make their new supervisor for euro-zone banks operational next year, but investors were cautious about the timeline for the plan. Europe's banking crisis has limited industrial activity world-wide, and further measures to shore up the region's financial system could spur a rebound in copper and other growth-sensitive assets, analysts said.

The caution toward Europe pushed the euro lower against the U.S. dollar, dragging on dollar-denominated copper by making the futures appear more expensive for buyers using other currencies.

Copper settlements (ranges include electronic and pit trading):
Oct $3.6485; down 9.85 cents; Range $3.6485-$3.7215
Dec $3.6375; down 10.55 cents; Range $3.6305-$3.7475