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METALS--Shanghai, London metals skid on North Korea tensions, China credit jitters
September 22, 2017 / 3:17 AM / a month ago

METALS--Shanghai, London metals skid on North Korea tensions, China credit jitters

 (Adds comment, detail, updates prices)
    By Melanie Burton
    MELBOURNE, Sept 22 (Reuters) - Metals in Shanghai and London
fell on Friday as investors slashed risk given escalating
tensions on the Korean peninsula and ongoing jitters about China
debt after a ratings downgrade. 
    "Metals have had quite a rally in the past few months and
have done so much faster than fundamentals would suggest they
should," said analyst Amy Li of National Australia Bank in
Melbourne.
    A combination of factors had led to the sell-off, Li said,
among them, rising geo-political tension with North Korea,
expectations for a more aggressive interest rate rise cycle in
the United States and to a smaller extent ongoing credit
concerns in China.
    "I would say this is a pullback from the very, very bullish
position we have seen in the past few months."     
    
    FUNDAMENTALS
    * SHFE: In Shanghai, metals fell between 1 percent and 4.5
percent, with the steepest tumble in nickel, which will also
face higher trading fees on the Shanghai Futures Exchange (ShFE)
from Friday.
    * LME: In London, lead was the worst performing metal, down
4 percent, while nickel plunged 3.2 percent. Investors
had surged into metals on prospects of resilient China demand
and environmental curbs that have cut into supply. 
    * LME COPPER: LME copper tumbled to its lowest since
Aug. 16, touching $6,400 a tonne, down 1.2 percent.
    * SHFE COPPER: The most-active ShFE copper futures
slid 1.4 percent to 49,700 yuan ($7,548) a tonne.
    * CONFUSION: "Not sure why so aggressive a move, guess the
U.S. sanctions, delayed reaction in metals to FOMC," said one
trader in Hong Kong. "Confused markets I have to say, and on top
of that trying to get out of risk when its all one way only
exacerbates the move and creates deeper moves in ever decreasing
liquidity."
    * N. KOREA: North Korean leader Kim Jong Un blasted U.S.
President Donald Trump as "mentally deranged" on Friday and
vowed to make him pay dearly for threatening to destroy his
country, hours after Trump ordered fresh sanctions over
Pyongyang's weapons programmes.
    * CHINA CREDIT: S&P Global Ratings downgraded China's
long-term sovereign credit rating on Thursday, less than a month
ahead of one of the country's most sensitive political
gatherings, citing increasing risks from its rapid build-up of
debt.
    * CHINA FACTORIES: Thousands of small factories in China,
making everything from steel to chemicals, are scrambling for
access to the country's clogged rail network as Beijing curbs
the use of diesel trucks in an effort to tackle air pollution.

    * MACQUARIE: Australia's Macquarie Group Ltd has
overtaken Goldman Sachs to break into the top three banks for
commodities business, having significantly expanded its U.S.
energy operations in recent years while rivals cut back.
        
    * COMING UP: Germany Markit Mfg PMI flash Sep at 0730 GMT   
    PRICES    
 
                                   0242 GMT          
 Three month LME copper                        6413.5
 Most active ShFE copper                        49690
 Three month LME aluminium                     2142.5
 Most active ShFE aluminium                     16525
 Three month LME zinc                            3045
 Most active ShFE zinc                          24860
 Three month LME lead                          2412.5
 Most active ShFE lead                          20210
 Three month LME nickel                         10695
 Most active ShFE nickel                        85080
 Three month LME tin                            20450
 Most active ShFE tin                          143650
                                                     
                                                     
 LME/SHFE COPPER              LMESHFCUc3       387.72
 LME/SHFE ALUMINIUM           LMESHFALc3       125.44
 LME/SHFE ZINC                LMESHFZNc3       907.55
 LME/SHFE LEAD                LMESHFPBc3        337.7
 LME/SHFE NICKEL              LMESHFNIc3      1515.33
 

($1 = 6.5843 Chinese yuan renminbi)

    
 (Reporting by Melanie Burton; Editing by Richard Pullin and
Christian Schmollinger)
  
 
 

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