November 20, 2019 / 8:43 AM / 22 days ago

METALS-London copper slips on U.S.-China trade deal uncertainty

(Updates prices)

MANILA, Nov 20 (Reuters) - London copper slipped on Wednesday on renewed U.S.-China trade friction, but Shanghai copper jumped to its highest in more than a week after the Chinese central bank cut its lending benchmark rate to shore up the slowing economy.

Three-month copper on the London Metal Exchange was down 0.2% at $5,866 a tonne by 0803 GMT.

“The immediate focus remains on the U.S.-China trade talks, and markets seem reluctant to move much in either direction until they are resolved,” ANZ Research analysts said in a note.

U.S. President Donald Trump issued a fresh threat against China on Tuesday, saying Washington would raise tariffs on Chinese imports if no deal was reached with Beijing to end the spat.

Stimulus measures by China, the world’s top consumer of the metal used in power and construction, continued to support copper prices, however.

The most-traded copper contract on the Shanghai Futures Exchange ended up 0.4% at 47,050 yuan ($6,694.27) a tonne, after touching its highest since Nov. 12.

COPPER WEEK: Two leading Chinese copper smelters, Jiangxi Copper Co and Daye Nonferrous Metals Group, need charges for processing copper concentrate into metal to be higher than the current spot rate to avoid losing money.

COPPER WEEK: Freeport McMoRan Inc expects treatment and refining charges for copper concentrates in 2020 to be “well below” last year’s levels as Chinese smelting capacity is expected to rise.

TRADE TALKS: A “phase one” trade deal between the United States and China was supposed to be a limited agreement that would allow leaders from both countries to claim an easy victory while soothing financial markets.

CHINA RATE CUT: On Wednesday, the central bank cut its new benchmark lending rate for the third time since its debut in August, as widely expected.

The cut was the second to a key Chinese rate this week and came a day after central bank governor Yi Gang said Beijing would step up credit support and lower real lending rates, as pressure on the world’s second-largest economy increases.

ALUMINIUM: China will carry out spot checks on safety production in steel and aluminium processing industries from late November to mid-December, the Ministry of Emergency Management said.

LME PRICES: Aluminium was up 0.1%, zinc was virtually flat, lead gained 0.5%, while tin lost 0.5% and nickel slumped 2.2%.

ShFE PRICES: Aluminium edged up 0.2%, zinc gained 0.4%, tin rose 0.3%, while nickel lost 2.2% and lead slipped 0.3%.

NICKEL: “With warehouse stocks around the globe starting to stabilise, or in the case of ShFE held stocks, increase to their highest level since April 2018 of 35,309 tonnes by end-week, the nickel market appears to be tilting towards a bearish end for the year,” said Natalie Scott-Gray, senior analyst at INTL FCStone.

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

$1 = 7.0284 yuan Reporting by Enrico dela Cruz; Editing by Subhranshu Sahu and Susan Fenton

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