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3 months ago
METALS-Copper touches one-week high on short-covering, focus on China
May 11, 2017 / 9:55 AM / 3 months ago

METALS-Copper touches one-week high on short-covering, focus on China

* LME/ShFE arb: tmsnrt.rs/2oQ5nm2

* Focus on Chinese industrial activity and investment

* Copper stalls ahead of resistance at $5,635 (Adds official prices)

By Pratima Desai

LONDON, May 11 (Reuters) - Copper prices rose on Thursday as funds cut bearish bets, but the sustainability of gains will depend on industrial activity and investment data from top consumer China next week.

Benchmark copper on the London Metal Exchange finished up 0.8 percent at $5,543 a tonne after touching $5,627.50, its highest since May 3, earlier in the session.

"The stronger oil price could be a factor," said Capital Economics' chief commodities economist Caroline Bain.

"The PMIs (purchasing managers' indexes) and trade data suggested the Chinese economy was weakening. If that is confirmed in the activity data on Monday, then negative sentiment could return."

CHINA DEMAND: China accounts for nearly half of global copper consumption estimated at 23 million tonnes this year.

CHINA PRODUCTION: Industrial output is expected to have risen by 7.1 percent in April, slowing from 7.6 percent in March, when it rose the fastest on a yearly basis since December 2014.

CHINA INVESTMENT: Fixed asset investment probably stayed relatively stable at 9.1 percent in April, from 9.2 percent in March.

CRUDE: Oil prices rose after a fall in U.S. inventories and a bigger-than-expected cut in Saudi supplies to Asia.

CHINA PMI: Surveys of manufacturers showed activity slowing in April, while trade data showed import growth slowing and export growth halving.

TECHNICALS: Copper stalled ahead of resistance around $5,632, the 21-day moving average. Fibonacci support kicks in at $5,410.

CHILE: Workers at BHP Billiton's Cerro Colorado copper mine in Chile will strike for 24 hours in coming weeks to protest against recent layoffs and the company's general attitude towards miners, the main union said.

DISRUPTIONS: "In January, we estimated a disruption allowance of roughly 1 million tonnes," Barclays said in a note. "Only five months into the year, we conservatively estimate that 464,000 of supply has been lost to disruptions, or roughly 44 percent of our allowance."

PHILIPPINES: Extractive industries such as mining should be promoted, not curbed, the Philippines' finance minister said, promising investors there would be no more arbitrary suspensions of operations and more transparency in regulation.

NICKEL SUPPLY: Prices have been supported this year by worries about supplies of nickel ore from the Philippines, the world's top ore producer.

NICKEL PRICE: Nickel closed up 2.1 percent at $9,310 a tonne after an earlier one-week high at $9,385. Traders said nickel was also up on short-covering, but that resistance at the 21-day moving average around $9,650 could cap further gains.

PRICES: Aluminium ended up 0.5 percent at $1,875 a tonne, zinc finished 0.4 percent lower at $2,591 and lead closed down 0.6 percent at $2,177. Tin did not trade but was bid up 0.9 percent at $19,850 a tonne.

Additional reporting by Peter Hobson; Editing by Mark Potter and Susan Thomas

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