September 16, 2019 / 11:17 AM / a month ago

METALS-Copper drifts lower on concern about fragile China data

* Lead, zinc hit multi-month highs after mine suspension

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

By Eric Onstad

LONDON, Sept 16 (Reuters) - Copper slipped on Monday after weak Chinese data fuelled worries about demand, but lead and zinc hit multi-months peaks after a mine suspension.

China’s industrial production grew at the weakest pace in 17-1/2 years last month and fixed-asset investment in January-August increased at a slightly lower rate than expected, data showed.

China is the biggest user of copper, which is used widely in power and construction.

“It was definitely weaker than expected. Copper has rallied pretty decently over the past couple weeks, but this was a little reminder that the underlying fundamentals are still questionable,” said Colin Hamilton, director of commodities research at BMO Capital.

Chinese Premier Li Keqiang said it is “very difficult” for the world’s second-largest economy to keep growing at a rate of 6% or more, after a 6.3% expansion in the first half of the year.

Three-month copper on the London Metal Exchange (LME) slipped 1.8% to $5,870 a tonne in final open-outcry trading after hitting a 1-1/2-month high in the previous session.

At its peak on Friday, copper had rebounded 8% since touching a two-year low on Sept. 3.

* PENASQUITO MINE: Lead hit a six-month peak of $2,121 a tonne and zinc a 1-1/2 month high of $2,404.50 after Newmont Goldcorp said on Sunday it had suspended operations at its Penasquito gold mine in Mexico due to an illegal blockade.

The metals later gave up their gains, with LME lead ending the day down 0.4% at $2,098, while zinc shed 0.8% to $2,365.

Penasquito was expected to produce 245 million lbs or 111,130 tonnes of zinc this year, plus 180 million lbs or 81,647 tonnes of lead as a byproduct, the company said in a presentatihere(1).pdf this month.

* CHINA ALUMINIUM: LME aluminium dropped 0.9% to close at $1,793 a tonne despite data showing that China’s primary aluminium output in August fell 0.5% from the previous month as unexpected outages at two key smelters dented production.

“Everyone’s been so scared that Chinese output is going to ramp up, but it hasn’t,” BMO’s Hamilton said.

* ALUMINIUM STOCKS: LME inventories fell to 908,425 tonnes, the lowest since November 2007. MALSTX-TOTAL

* CHINESE NPI: LME nickel slid 2.1% to finish at $17,375 a tonne, after touching $17,105, the weakest since Aug. 30, after data showed China’s nickel pig iron (NPI) output hit a record 53,200 tonnes of contained nickel in August.

* PHILIPPINES NICKEL: A nickel mining hub in the southern Philippines has suspended extraction operations indefinitely as the regional government conducts an industry audit.

* PRICES: Tin bucked the weaker trend, climbing 4.1% to end at $17,150.

* For the top stories in metals and other news, click or (Reporting by Eric Onstad; Editing by Louise Heavens and Jan Harvey)

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