July 26, 2019 / 4:24 AM / 23 days ago

METALS-Copper heads for weekly drop as ECB holds off easing

(Updates prices)

By Mai Nguyen

SINGAPORE, July 26 (Reuters) - Copper prices declined on Friday, with London copper on track for its first weekly decline in three, as comments from European Central Bank President Mario Draghi were less dovish than expected and the bank held rates steady at its latest meeting.

An aggressive easing by a major central bank generally supports growth and helps lift metal prices.

Three-month copper on the London Metal Exchange (LME) was down 0.5% at $5,978 a tonne, as of 0714 GMT, while the most-traded copper contract on the Shanghai Futures Exchange was almost flat at 47,050 yuan ($6,838.86) a tonne.

The European Central Bank signalled its intention to explore monetary easing but left interest rates unchanged on Thursday.

LME copper has dropped 1.5% so far this week, slated to snap two consecutive weekly gains.

FUNDAMENTALS

* FITCH: Fitch predicted LME copper prices could head towards $5,000-$5,400 a tonne, in case, recession risks grow, sentiment towards copper worsens and in the absence of a surprise supply disruption, the firm said in its report.

* “The potential impact on metal prices of a recession would be very significant ... given the Chinese government’s more cautious approach towards debt building and vigilance against broad-based stimulus measures in recent years,” Fitch said.

* PRICES: LME aluminium decreased 0.5%, nickel rose 0.4%, zinc fell 0.7% and lead dropped 0.9%. In Shanghai, aluminium rose 0.2%, nickel dropped 1.2% and zinc declined 0.3%.

* TRADE TALKS: Lead negotiators for China and the United States will meet in Shanghai on Tuesday for two days in the next round of trade talks aimed to end their year-long trade war, China’s commerce ministry confirmed.

* TIN: Indonesia’s largest tin miner PT Timah expects to more than double its refined tin production this year to around 70,000 tonnes, but has started taking steps to slow down output amid a sluggish market, a company’s official said.

* YUGUANG LEAD: Henan Yuguang Gold and Lead Co, China’s biggest lead producer, has completed maintenance at its 400,000 tonnes per year lead smelter in Jiyuan and resumed production, its sales director Li Xiaodong said.

* LEAD SPREAD: The premium of LME lead cash contract over the three-month contract CMPB0-3 surged to $10.50 a tonne on Thursday from $1.50 in the previous session, indicating nearby supply shortage.

* PERU COPPER: Peru’s president said his government will re-evaluate its recent decision to grant a construction permit to Southern Copper Corp for its proposed mine Tia Maria at the request of local authorities calling for its annulment.

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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 = 6.8798 Chinese yuan) (Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips)

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