April 30, 2019 / 11:20 AM / 20 days ago

METALS-Copper prices rise despite weak Chinese factory data

(Updates with closing prices)

By Peter Hobson

LONDON, April 30 (Reuters) - Copper prices rose on Tuesday as investors bet that top consumer China would respond to weak factory data by implementing fresh stimulus measures.

Zinc also gained more than 1 percent as surging premiums for cash metal on the London Metal Exchange (LME) pointed to a shortage of nearby supply.

Benchmark LME copper on the LME closed 0.3 percent up at $6,415 a tonne.

The metal used in power and construction has gained about 8 percent this year on hopes that China can prevent a sharp economic slowdown, though prices have been trapped around $6,500 since late February.

“It is more likely (after the Chinese factory data) that we will see further stimulus measures,” said Commerzbank analyst Daniel Briesemann.

He said a likely trade deal between the United States and China would lift copper, but predicted prices would return to $6,500 a tonne at the end of the year.

Further support came from a weaker U.S. dollar, making metals cheaper for buyers with other currencies.

CHINA FACTORIES: Two surveys on Tuesday showed a loss of momentum in Chinese factory activity in April.

The unexpected slowdown in growth followed upbeat data in March, which had raised hopes that the world’s largest consumer of metals was getting back on firmer footing.

TRADE WAR: U.S. Treasury Secretary Steven Mnuchin said he hoped to make “substantial progress” with Chinese negotiators in the next two rounds of trade talks.

WESTERN ECONOMIES: The euro zone and United States reported positive economic data.

ZINC SPREAD: The premium for cash zinc over the three-month contract on the LME MZN0-3 has leapt to $134.50, its highest since 1997, suggesting a shortage of immediately available metal.

ZINC STOCKS: However, zinc stocks in LME-registered warehouses MZNSTX-TOTAL have risen to 81,325 tonnes from record lows around 50,000 tonnes earlier this month.

Stockpiles in Shanghai Futures Exchange (ShFE) warehouses, at 72,090 tonnes, are down from about 124,000 tonnes in March but up sharply from the start of the year. ZN-STX-SGH

ZINC PRICE: LME zinc ended 1.2 percent up at $2,825.50 a tonne, near a 9-1/2 month high of $2,958 reached on April 1.

GLENCORE: Glencore cut its target for 2019 copper output to about 1,460,000 tonnes from around 1,540,000 tonnes.

CHILE: Copper output in Chile fell 3.5 percent to 479,080 tonnes in March.

CHALCO: China’s Chalco said that first-quarter aluminium output fell to 950,000 tonnes from 1.02 million tonnes a year earlier.

COLUMN: Aluminium’s bull narrative is lost in the shadows, writes Reuters columnist Andy Home.

OTHER METALS: LME aluminium finished 1.6 percent down at $1,798 a tonne, lead fell 2.3 percent to $1,925 and tin closed flat at $19,650.

Nickel did not trade in closing rings but was 1.2 percent lower at $12,260 at 1619 GMT in electronic trading.

Reporting by Peter Hobson Additional reporting by Mai Nguyen Editing by Jon Boyle and David Goodman

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