October 25, 2019 / 3:31 AM / 18 days ago

METALS-Copper falls on weak macro outlook, 2020 surplus

SINGAPORE, Oct 25 (Reuters) - Copper prices fell on Friday, as investors were cautious about the global economy and demand for copper, as well as a forecast that there would be a surplus of the red metal next year.

Copper is often used a gauge of global economic health, which has been hit by a prolonged trade war between China and the United States, the world’s two biggest economies.

The copper market should see a surplus of 281,000 tonnes in 2020, swinging from this year’s deficit of 320,000 tonnes, the International Copper Study Group said this week.

Copper prices on the London Metal Exchange (LME) fell 0.2% to $5,868.50 a tonne by 0254 GMT, while the most active copper contract on the Shanghai Futures Exchange (ShFE) was almost unchanged at 47,300 yuan ($6,688.44) a tonne.

However, prices were supported by supply shortage fears due to production disruptions at several copper operations in Chile, the world’s biggest producer of the metal, due to nationwide protests.

LME copper was on track for its third weekly gain, having risen 2.6% so far this month, while ShFE copper is set for its first weekly rise in three weeks.

FUNDAMENTALS

* PHILIPPINE COPPER: The Philippine mining regulator has recommended lifting a three-year suspension of the environmental permit for the Tampakan copper-gold project, potentially one of the world’s largest copper mines.

* ZINC: The premium of LME cash zinc over the three-month contract MZN0-3 touched its highest in nearly a month at $41.25 a tonne, indicating tight nearby supplies, while LME on-warrant zinc stocks were at their record low of 35,125 tonnes. MZNSTX-TOTAL

* ZINC DEFICIT: The global zinc market saw a 106,000-tonne shortfall over January-July, the latest data from the International Lead and Zinc Study Group showed.

* INDONESIA NICKEL: Indonesia’s mining ministry has recommended an increase of about 330,000 tonnes in the nickel ore export quota of miner PT Aneka Tambang.

* PRICES: LME aluminium fell 0.1%, nickel dropped 0.7%, zinc lost 0.4% and lead declined 0.3%. ShFE aluminium eased 0.1%, nickel rose 0.9%, zinc fell 0.7% while lead dipped 0.2%.

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MARKETS NEWS

* Asian shares inched up, tracking small gains in world markets as positive earnings offset economic growth concerns, while sterling weakened as the prospect of a British election added fresh uncertainty to the Brexit drama.

DATA/EVENTS (GMT)

0800 Germany Ifo Business Climate New Oct

0800 Germany Ifo Curr Conditions New Oct

0800 Germany Ifo Expectations New Oct

1400 US U Mich Sentiment Final Oct

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 = 7.0719 Chinese yuan renminbi) (Reporting by Mai Nguyen; Editing by Shounak Dasgupta)

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