August 1, 2019 / 7:38 AM / 4 months ago

METALS-Copper hits 3-week low as dovish Fed dampens rate-cut outlook

 (Adds Shanghai closing prices, updates London prices)
    BEIJING, Aug 1 (Reuters) - London copper prices slipped to a
three-week low on Thursday, after Federal Reserve Chairman
Jerome Powell said the U.S. central bank's first rate cut since
2008 was not the start of a long easing cycle, and Sino-U.S.
trade talks appeared to have made little progress. 
    The Fed lowered interest rates by the expected 25 basis
points, but the dollar jumped on Powell's comments,
making dollar-denominated metals more expensive for holders of
other currencies and weighing on prices. 
    The trade talks in Shanghai ended without any meaningful
progress, "highlighting the reality that a deal is far from
being reached," ANZ said in a note, adding that China's
purchasing managers' index (PMI) was also "mildly disappointing"
for the base metals sector.
    The official PMI rose to 49.7 in July, from the previous
month's 49.4, but remained below the 50-point mark that
separates growth from contraction on a monthly basis. The
private Caixin/Markit manufacturing PMI, released on Thursday,
was largely in line with the official gauge.
    * COPPER: Three-month copper on the London Metal Exchange
 dropped for a third session, by as much as 0.6% to
$5,893.50 a tonne, the lowest since July 10. It stood at
$5,920.50 a tonne, as of 0723 GMT. The most-traded September
copper contract on the Shanghai Futures Exchange closed
down 0.5% at 46,620 yuan ($6,757.31) a tonne.
    * USD: The dollar rose to a two-year peak against the euro
and hit a two-month high versus the yen.
    * OTHER METALS: Nickel and zinc fell the
most in London, shedding 1.1% and 1.6%, respectively.
    * ZAMBIA: Vedanta Resources said on Wednesday it
had notified its Zambian joint venture partner ZCCM-IH that it
had launched arbitration proceedings related to an attempt by
the Zambian government to liquidate Vedanta's majority-owned
Konkola Copper Mines.
    * LYNAS: Malaysia is waiting on Australian miner Lynas
Corp's plan to manage low-level radioactive waste from
its rare earths processing plant ahead of a license renewal,
Malaysian Prime Minister Mahathir Mohamad said on Thursday.
    * ALUMINIUM: A Chinese billionaire has been indicted by a
grand jury on charges he schemed with the aluminium company he
founded to evade $1.8 billion of tariffs by smuggling huge
amounts of the metal into the United States, federal prosecutors
said on Wednesday.
    * Asian shares fell to six-week lows as the Federal Reserve
rattled markets.    
 BASE METALS PRICES                       0726 GMT
 Three month LME copper                     5916.5
 Most active ShFE copper                     46620
 Three month LME aluminium                    1792
 Most active ShFE aluminium                  13855
 Three month LME zinc                       2405.5
 Most active ShFE zinc                       19265
 Three month LME lead                         1993
 Most active ShFE lead                       16385
 Three month LME nickel                      14335
 Most active ShFE nickel                    112590
 Three month LME tin                         17260
 Most active ShFE tin                       134260
 ($1 = 6.8992 Chinese yuan renminbi)

 (Reporting by Tom Daly, Editing by Sherry Jacob-Phillips and
Rashmi Aich)
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