January 24, 2018 / 4:35 AM / a month ago

METALS-Shanghai copper sinks after LME inventory jump

 (Adds Shanghai closing prices, updates London prices)
    BEIJING, Jan 24 (Reuters) - Shanghai copper prices fell on
Wednesday, tracking a sharp decline in London on Tuesday after
London Metal Exchange (LME)refined copper inventories surged and
concerns grew over the strength of import demand in top copper
consumer China. 
    On-warrant copper stocks, metal not earmarked for delivery
from warehouses and available for investors, in facilities
certified by the LME MCUSTX-TOTAL jumped by 28 percent on
Tuesday, data showed, with traders saying there could be even
more to come.
    Cancelled LME warrants, or orders to take copper out of a
warehouse, plunged by 16 percent on Tuesday to 44,000 tonnes,
the biggest decline in the past four months, according to
brokerage Argonaut Securities.
    "This decline in cancelled warrants may point to a weak
imports appetite from China in January," analyst Helen Lau wrote
in a note. 
    China imported 450,000 tonnes of unwrought copper in
December, down 6.9 percent year-on-year, according to customs
data released on Tuesday. China's own refined copper production
was also at an all-time high of 865,000 tonnes last month.

              
    FUNDAMENTALS
    * SHFE COPPER: The most-traded March copper contract on the
Shanghai Futures Exchange (ShFE) ended down 1.7 percent
at 52,730 yuan ($8,249.89) a tonne, its biggest daily drop since
Dec. 6 and its its lowest close since Dec. 14.
    * LME COPPER: Three-month copper on the LME gained
0.3 percent to $6,945 a tonne at 0754 GMT, partly recovering
from a 2.1 percent drop to a one-month low in the previous
session.
    * LME INVENTORIES: "All eyes will focus on the stocks again
today to see if this is the start of a short-term trend or
yesterday was a one-off," broker Marex Spectron said in a note. 
    * USD: The dollar index was down 0.2 percent to a
three-year low. A weak greenback makes dollar-denominated metals
cheaper for holders of other currencies and supports prices.
    * LEAD/ZINC: ShFE lead's recent rally ran out of
steam as the metal closed flat at 19,575 yuan a tonne, while
zinc shed 1 percent to 25,875 a tonne. Both were also
trading down in London.
    * CHILE: Chile's conservative President-elect Sebastian
Pinera on Tuesday named a former finance minister in the top
copper exporter, Felipe Larrain, to fill the same spot again in
his new cabinet.
    * RIO: The top U.S. securities regulator on Tuesday rejected
arguments by Rio Tinto Plc, and two former top
executives that its civil lawsuit claiming they concealed the
plunging value of coal assets owned by the big Anglo-Australian
mining company should be dismissed.
    * BRAZIL: Anglo American PLC said on Tuesday it
expects to receive long-awaited licenses on Friday which will
pave the way for the mining company to boost its Brazilian iron
ore production capacity by about 56 percent.
    For the top stories in metals and other news, click       
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    MARKETS NEWS    
    *  Asian share markets took a time out on Wednesday as
investors were left breathless at the breakneck pace of recent
gains, while a fresh burst of speculative selling took the U.S.
dollar to three-year lows on the euro.
    {MKTS/GLOB]    
        
    PRICES      
    
 BASE METALS PRICES                       0754 GMT
 Three month LME copper                       6945
 Most active ShFE copper                     52720
 Three month LME aluminium                    2214
 Most active ShFE aluminium                  14640
 Three month LME zinc                       3389.5
 Most active ShFE zinc                       25870
 Three month LME lead                         2599
 Most active ShFE lead                       19570
 Three month LME nickel                      12785
 Most active ShFE nickel                     98640
 Three month LME tin                         20720
 Most active ShFE tin                       146410
                                                  
 BASE METALS ARBITRAGE                            
 LME/SHFE COPPER             LMESHFCUc3     947.75
 LME/SHFE ALUMINIUM          LMESHFALc3   -1795.34
                                         
 LME/SHFE ZINC               LMESHFZNc3     223.21
 LME/SHFE LEAD               LMESHFPBc3    -503.29
 LME/SHFE NICKEL             LMESHFNIc3    2418.47
                                         
 
($1 = 6.3916 Chinese yuan renminbi)

    
 (Reporting by Tom Daly; Editing by Richard Pullin and Christian
Schmollinger)
  
 
 
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