June 10, 2019 / 7:45 AM / 17 days ago

METALS-Copper rebounds as U.S.-Mexico deal calms nerves

(Updates prices)

MANILA, June 10 (Reuters) - Copper prices rose in Asian trading on Monday following eight straight weekly losses, after Washington struck a deal to avert a tariff war with Mexico, boosting sentiment on trade and easing concerns about a global slowdown.

The United States dropped its threat to impose tariffs on Mexico in a deal to combat illegal migration from Central America, helping to calm markets already worried about the Sino-U.S. trade war.

“There’s improvement (in investor sentiment) and that certainly helps a bit,” said Helen Lau, analyst at Argonaut Securities in Hong Kong.

Copper’s rebound also followed data on Monday showing China’s imports of the metal fell 10.9% in May from the previous month to 361,000 tonnes.

“There was a slowdown in imports because there was a lot of supply in the Chinese spot market, and that resulted in the very low premium in the sense that there was no incentive for traders to import copper,” Lau said.

“But the spot premium has started to pick up,” she said.

China’s exports unexpectedly returned to growth in May despite higher U.S. tariffs, but imports fell the most in nearly three years in a further sign of weak domestic demand that could prompt Beijing to step up stimulus measures.

“(The) worsening trade relations between China and the U.S. remain a key headwind for commodity demand,” ANZ said in a note. “We expect China’s stimulatory measures to potentially mitigate some of the demand concerns.”

FUNDAMENTALS

* Three-month copper on the London Metal Exchange (LME) was up 0.6% at $5,831 a tonne, as of 0735 GMT. The benchmark fell 0.2% on Friday, when it also posted a weekly loss of 0.5%.

* The most-traded copper contract on the Shanghai Futures Exchange (ShFE) closed 0.4% higher at 46,260 yuan ($6,672.44) a tonne, as Chinese markets reopened after a three-day weekend.

* PRICES: LME nickel rose 0.6%, while ShFE nickel advanced 0.6%; LME lead jumped 1.4% and ShFE lead gained 1%.

* MEXICO: U.S. President Donald Trump defended his administration’s deal with Mexico against criticism that there were no major new commitments to stem a flow of Central American migrants crossing into the United States, and said on Sunday more details would soon be released.

* G20: Group of 20 finance leaders on Sunday said that trade and geopolitical tensions have “intensified”, raising risks to improving global growth, but they stopped short of calling for a resolution of a deepening U.S.-China trade conflict.

* IMF: International Monetary Fund Managing Director Christine Lagarde on Sunday called on the Group of 20 major economies to prioritise resolving trade tensions to mitigate risks to global growth.

* RARE EARTHS: Rare earth exports by China, the world’s dominant producer, fell 16% in May from a month earlier amid an increased focus on the raw materials due to the Sino-U.S. trade war, although the drop was in line with usual trading.

* For the top stories in metals and other news, click or

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 = 6.9330 yuan)

Reporting by Enrico dela Cruz; Editing by Richard Pullin and Sherry Jacob-Phillips

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