September 5, 2018 / 4:34 AM / 2 months ago

METALS-Shanghai copper tumbles to 14-month low as trade tensions simmer

(Adds details, updates prices)

BEIJING/MELBOURNE, Sept 5 (Reuters) - Shanghai copper fell to its lowest level in more than a year on Wednesday, down for a fifth straight session amid simmering U.S.-China trade tensions.

Open interest in Shanghai copper, a measure of market liquidity, on Tuesday hit its highest since July 18, as futures brokerages added a total of 3,047 lots to their short positions on the October contract. Shorts outnumber longs on every contract until at least January.

The Shanghai copper futures curve remains in backwardation until January, a sign of higher immediate demand, with China copper premiums SMM-CUYP-CN still near a 22-month high.

All other Shanghai base metals dropped with the exception of tin, which eked out a 0.5 percent rise.

“There appears no let-up in the selling in base metals amid the stronger USD, ongoing trade tension and emerging market turmoil,” ANZ said in a note.

FUNDAMENTALS

* SHFE COPPER: The most-traded October copper contract on the Shanghai Futures Exchange fell as much as 2 percent in the night session to 47,040 yuan ($6,881.72) a tonne, its lowest since June 2017. It ended down 1 percent at 47,510 yuan.

* LME COPPER: Three-month copper on the London Metal Exchange snapped a five-day losing streak to trade up 0.6 percent at $5,848 a tonne, as of 0911 GMT, as the dollar index edged down from a two-week high, making metals slightly cheaper for holders of other currencies.

* OTHER METALS: Shanghai nickel dropped 2.1 percent, after hitting its lowest since April 24 overnight, while zinc, which is down 17.3 percent year-to-date, lost 2.1 percent and lead slumped 1.7 percent.

* WAREHOUSING: Some warehouse firms want the London Metal Exchange to change its rules for delivering material so as to allow longer queues and boost revenues undermined by falling stocks, sources familiar with the matter said.

* ALUMINA: Alcoa’s alumina production has likely been hit by a four-week strike at its Western Australian operations, the Australian Workers’ Union said on Wednesday, raising the prospect of a widening supply deficit in the key aluminium-making ingredient.

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MARKETS NEWS

* A looming deadline in the U.S.-China trade conflict kept the dollar near two-week highs on Wednesday, inflicting fresh losses on emerging markets and sending world stocks lower for the fourth day in a row.

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

Reporting by Tom Daly in BEIJING and Melanie Burton in MELBOURNE; Editing by Sherry Jacob-Phillips and Darren Schuettler

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