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METALS-London copper hovers near 2-1/2-year high on vaccine, stimulus hopes

(Updates prices)

Nov 11 (Reuters) - London copper prices climbed towards their highest level in 29 months on Wednesday, as hopes for a coronavirus vaccine lifted expectations of a swift reopening of the global economy, while prospects of further stimulus also lent support.

Three-month copper on the London Metal Exchange rose 0.5% to $6,963 a tonne by 0707 GMT, hovering near its highest since June 2018 hit on Monday at $7,054 a tonne.

Prices of copper, often used as a gauge of global economic health, extended gains amid hopes that an economic rebound could also help Asia’s heavily trade-dependent markets.

Investors are also looking forward to additional stimulus from the United States and awaiting to hear from European Central Bank president Christine Lagarde about the European economic outlook and stimulus prospects in a speech at 1300 GMT.

“Copper is in a favourable environment here with perhaps both a vaccine and also more stimulus money to come to prop up demand from both investors and end users,” said commodities broker Anna Stablum of Marex Spectron.

The most-traded December copper contract on the Shanghai Futures Exchange closed down 0.4% to 51,960 yuan ($7,874.87) a tonne.

FUNDAMENTALS

* LME aluminium rose 0.5% to $1,917.50 a tonne and ShFE aluminium climbed as much as 1.6% to 15,190 yuan a tonne, its highest since November 2017.

* The discount of cash aluminium over the three-month contract CMAL0-3 expanded to $20.20 a tonne, indicating that supply tightness has eased.

* “ShFE investors are adding to longs. There’s strong demand. Units that are not consumed outside of China are tied into financing deals. (Market tightness) eased again, making it worthwhile for financing deals,” Stablum said.

* The net long in ShFE aluminum reached a three-year high of 21% of open interest on Tuesday, up for the seventh straight day, Marex Analytics data showed.

* Copper cathode output at China’s 22 copper smelters fell 5.4% on-year in October to 741,900 tonnes due to maintenance at two major plants, research house Antaike said.

* An executive from China Minmetals Corp on Tuesday called for the creation of a Chinese zinc smelters group - along the lines of an existing collective for copper - to negotiate with miners on concentrate supply and pricing.

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$1 = 6.5982 yuan Reporting by Mai Nguyen; Editing by Sherry Jacob-Phillips and Rashmi Aich

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