November 27, 2019 / 4:54 AM / 13 days ago

METALS-Copper hits two-week high as Trump comments lift demand prospects

(Updates prices)

By Mai Nguyen

SINGAPORE, Nov 27 (Reuters) - Shanghai copper prices hit a two-week high on Wednesday as positive signals from the Sino-U.S. trade negotiations fanned hopes of improving global appetite for the metal.

The United States and China are close to agreeing on the first phase of a trade deal, U.S. President Donald Trump said on Tuesday, adding that they were in the “final throes” of work.

The 16-month dispute has been weighing on global economic growth and demand for industrial metals, and hence, signs of progress often support metal prices.

The most-traded copper contract on the Shanghai Futures Exchange (ShFE) advanced as much as 0.7% to 47,410 yuan ($6,735.43) a tonne, its highest since Nov. 11. The contract closed up 0.6%, its third straight gain.

Benchmark three-month copper on the London Metal Exchange (LME) advanced 0.1% to $5,931.50 a tonne by 0710 GMT, hovering around a two-week high and on track for its fourth consecutive increase.

“(Copper) fundamentals appear to be trapped between faltering (mine) supply and weak demand, although market participants appear to be largely ignoring these fundamentals, and instead focusing on ongoing trade talks and macro developments,” ING said in a note.

FUNDAMENTALS

* COPPER STOCKS: Combined copper stocks in LME, ShFE and China bonded warehouses totalled 593,000 tonnes, the lowest level since at least 2013, exchanges and Shanghai Metals Market data provided on Refinitiv Eikon showed. MCUSTX-TOTAL CU-STX-SGH SMM-CUR-BON

* CHINA DEMAND: Copper consumption growth in China, the world’s top user of the metal, has been slowing as the economy grew at a near-30-year low in the third quarter this year amid the tariff dispute and cyclical reasons.

* CHINA: Profits at China’s industrial firms shrank at their fastest pace in eight months in October, tracking sustained drops in producer prices and exports and underscoring slowing momentum in the world’s second-largest economy.

* MUTANDA: Glencore’s Mutanda mine in Democratic Republic of Congo suspended operations earlier than schedule on Monday due to a lack of sulphuric acid, a key input for copper and cobalt extraction.

* KCM: Zambia’s Konkola Copper Mines smelter could restart next week after a delay of around a fortnight, mines minister Richard Masukwa told Reuters.

* NICKEL: LME nickel dropped 0.6% to $14,510 a tonne and ShFE nickel lost 0.2% to 114,000 yuan a tonne. Nickel prices have been pressured after the European Union launched a complaint at the World Trade Organization against Indonesia’s curbs on exporting nickel ore.

* OTHER PRICES: LME aluminium rose 0.4% to $1,759.50 a tonne, zinc advanced 0.8% to $2,317 a tonne, lead gained 0.6% to $1,955 a tonne, while tin was almost unchanged at $16,330 a tonne.

* SHFE PRICES: Aluminium fell 0.2% to 13,735 yuan a tonne, zinc rose 0.6% to 18,075 yuan a tonne, lead lost 0.6% to 15,290 yuan a tonne, while tin dipped 0.3% to 138,180 yuan a tonne.

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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 = 7.0389 Chinese yuan)

Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips and Subhranshu Sahu

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