October 18, 2019 / 4:48 AM / 2 months ago

METALS-Copper dips on bleak China data

(Recasts, updates prices)

By Mai Nguyen

SINGAPORE, Oct 18 (Reuters) - Copper prices gave up earlier gains to trade lower on Friday as disappointing data from China showed the impact of the protracted U.S-China war on its economy, but easing trade tensions and hopes of a soft Brexit cushioned losses.

China’s economic growth slowed slightly more than expected to 6% year-on-year in the third quarter, the weakest pace in almost three decades.

Three-month copper on the London Metal Exchange (LME) fell 0.2% to $5,725 a tonne by 0708 GMT, while the most-traded copper contract on the Shanghai Futures Exchange (ShFE) ended down 0.1% to 46,570 yuan ($6,573.13) a tonne.

Copper prices rose earlier during Asian trading hours, as traders expected more stimulus from the Chinese government.

“While GDP was a tad below expectation, this series (data)has been very stable that the market may not pay too much attention to as long as it has not dipped below 6%,” said Frances Cheung, Westpac Banking Corp’s head of macro strategy for Asia.

A Singapore-based metals trader said the data was actually in line with expectations from many analysts in China, adding the country is likely to roll out stimulus measures in sectors such as real estate and infrastructure to boost growth.

The trader added that China would want to pick up its growth in the fourth quarter in order to achieve the country’s full-year growth target of 6.0%-6.5%.

Copper prices are widely used as a gauge of economic health, which has been hurt by the prolonged trade war between the United States and China, as well as volatilities caused by the lengthy Brexit negotiations.

European Union leaders unanimously backed a new Brexit deal with Britain on Thursday, while China’s commerce ministry said China hoped to reach a phased agreement with the United States.

FUNDAMENTALS

* CHINA DATA: China’s industrial output grew a better-than-expected 5.8% in September, while fixed asset investment grew 5.4% from January-September, matching what analysts had tipped, but slowing from the 5.5% pace in the first eight months.

* CHINA ALUMINIUM: China’s aluminium production fell 1.6% from a year earlier, to 2.90 million tonnes in September, official data showed, amid ongoing outages at two key smelters.

* COPPER: MMG Ltd says it expects its Las Bambas mine’s production to fall marginally below its forecast after road blockages delayed some copper shipments to its customers.

* TIN: ShFE tin hit its highest since Sept. 12 at 141,970 yuan a tonne, after top refined tin producer Yunnan Tin said it would halt some production. LME tin eased 0.2% after hitting its highest since Sept. 13 on Thursday.

* TIN OUTLOOK: China’s refined tin output in January-September dropped 9.5% year-on-year to 116,450 tonnes and is seen falling further until November, an International Tin Association official said.

* PRICES: LME aluminium fell 0.1%, zinc declined 0.3% and lead dipped 0.1%. Shanghai aluminium advanced 0.1%, nickel fell 0.6% and zinc edged up 0.2%.

* ZINC: Zinc treatment and refining charges are expected to stay at high levels due to rising mine supply from Australia and South Africa.

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PRICES

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

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 7.0849 Chinese yuan) (Reporting by Mai Nguyen; Editing by Rashmi Aich and Amy Caren Daniel)

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