October 18, 2019 / 10:36 AM / a month ago

METALS-Copper climbs on Chinese property and infrastructure data

* Lead hits 15-month peak, zinc strongest since end-July

* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl (Updates with closing prices)

By Eric Onstad

LONDON, Oct 18 (Reuters) - Copper prices rose on Friday after positive Chinese data on property and infrastructure growth, while zinc and lead hit multi-month highs as investors worried about shortages.

Industrial metals prices were volatile after 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.

Prices headed higher, though, as investors digested the data, which also showed China’s property investment grew 10.5% in the first nine months of 2019, infrastructure investment rose 4.5% and industrial output outpaced forecasts at 5.8% in September.

“There was a slight re-acceleration in property new starts growth, which is quite an important signal given a lot of pessimism about the Chinese property sector,” said Nicholas Snowdon, an analyst at Deutsche Bank in London.

“There was also a slight pickup in infrastructure investment growth, so the two key drivers of on-shore metals demand were slightly on the positive side, but they’re nothing to get too carried away about.”

A Singapore-based metals trader said China was likely to roll out further stimulus measures in sectors such as real estate and infrastructure to boost growth in the fourth quarter.

Three-month copper on the London Metal Exchange (LME) gained 1.2% to $5,806 a tonne in final open-outcry trading after edging up 0.2% a day earlier.

* COMMODITY OUTLOOK: The outlook for commodities in 2020 is expected to brighten, Capital Economics said in a note.

“We expect global economic growth to pick up over the course of the year, which in turn will prompt a rise in investor risk appetite. Both developments should give a boost to commodities demand,” said Caroline Bain, chief commodities economist.

* ZINC: LME benchmark zinc rose 0.7% to close at $2,457 a tonne, the highest since July 30.

Some analysts have pointed to smelter shutdowns as tightening supply, but Deutsche Bank’s Snowdon said that was not the only driver.

“I think demand has held up better than expected, and that’s supported refined imports at a higher level than would have been anticipated and in turn why the ex-China markets are staying tight,” he said.

* LEAD SPREAD: The premium of LME cash lead over the three-month contract CMPB0-3 surged to $21.75 a tonne by Thursday’s close, the highest since August and up from $8 a day earlier, indicating tight nearby supplies in LME warehouses.

The shortages were also linked to a large position, traders said, after LME data showed one party held 80-89% of available inventories and short-term futures.

LME lead gave up 0.4% to $2,181 a tonne, reversing direction after hitting $2,214.50, the highest since July last year.

* PRICES: LME aluminium rose 0.6% to finish at $1,738 a tonne, nickel dipped 0.3% to $16,230 and tin shed 1.2% to $16,950.

* For the top stories in metals and other news, click or (Additional reporting by Mai Nguyen in Singapore; Editing by Mark Potter and Elaine Hardcastle)

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