September 18, 2018 / 11:20 AM / 3 months ago

METALS-Copper rebounds, shrugs off deepening U.S.-China trade row

(Updates with closing prices)

By Peter Hobson

LONDON, Sept 18 (Reuters) - Copper prices rallied on Tuesday as investors shrugged off new tit-for-tat tariffs by China and the United States to send stock markets higher and the dollar lower.

Fears that a U.S.-China trade war would dampen demand for commodities have pushed industrial metals sharply lower in recent months, with copper down 17 percent from a June high.

But with investors already braced for tariffs, copper was supported by the unexpected resilience of global share prices and non-U.S. currencies and expectations that stimulus in China, the largest metals consumer, will underpin demand. {FRX/]

“The negative effects of any tariffs and any falling demand in China (as a result) are being effectively countered by increased infrastructure spending,” BMO Capital Markets analyst Kash Kamal said, adding that the tariff decision “was baked in.”

LME COPPER: Benchmark copper on the London Metal Exchange closed up 2.4 percent at $6,087 a tonne after touching a 14-month low of $5,733 last month.

TECHNICALS: Copper broke above its recent downtrend line coming in at around $6,040.

TRADE WAR: China said it would levy tariffs on about $60 billion worth of U.S. goods after President Donald Trump said he was imposing 10 percent tariffs on about $200 billion worth of Chinese imports and threatened duties on about $267 billion more.

RARE EARTHS: The tariffs did not include rare earth elements.

GLOBAL MARKETS: Global share markets rose, with China’s blue-chip CSI300 index adding 2 percent thanks to a rally in infrastructure stocks.

DOLLAR: The dollar meanwhile hit its weakest since late July against a basket of major peers, supporting dollar-priced metals by making them cheaper for buyers with other currencies. China’s yuan was steady against the greenback.

PERU: MMG revised guidance for 2018 copper concentrate production at its Las Bambas mine in Peru to 375,000-395,000 tonnes from 410,000-430,000 tonnes.

ZINC: LME zinc closed up 1.3 percent at $2,349 a tonne, rebounding from Monday’s near 2-year low but butting up against its downtrend line at around $2,380.

DEFICIT: The global zinc market deficit deepened to 32,500 tonnes in July from 14,200 tonnes in June, data from the International Lead and Zinc Study Group (ILZSG) showed.

SPREAD: The premium of three-month LME zinc over the cash contract MZN0-3 at $23 was the highest since April last year.

OTHER METALS: LME aluminium finished up 0.2 percent at $2,035 a tonne, nickel ended 1.1 percent higher at $12,400, lead gained 0.1 percent to $2,074.50 and tin closed down 0.3 percent at $18,975.

Additional reporting by Manolo Serapio Jr. Editing by Jan Harvey and Edmund Blair

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