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METALS-Copper edges higher on Chilean supply worries

HANOI, May 17 (Reuters) - Copper prices rose on Monday as worries over supply from top producer Chile mounted after workers at two mines rejected a contract offer from the company and threats of a strike loomed.

A union representing workers at BHP’s Escondida and Spence mines in Chile rejected the company’s contract offer, raising the risk of a strike at the two sprawling copper deposits, the union’s president said on Friday.

Chilean law allows either party to now request a five-day government mediation period, extendable for an additional five days, ahead of any eventual strike. BHP told Reuters it believed the two parties could still reach an agreement.

Three-month copper on the London Metal Exchange advanced 0.7% to $10,316 a tonne by 0254 GMT, while the most-traded June copper contract on the Shanghai Futures Exchange edged up 0.2% to 74,950 yuan ($11,639.46) a tonne.

FUNDAMENTALS

* China Hongqiao Group, the world’s top private sector aluminium producer, plans to move more smelting capacity from its base in industrial Shandong to the hydropower-rich province of Yunnan, two sources said.

* Yangshan copper premium SMM-CUYP-CN fell to $37 a tonne, its lowest since February 2016, indicating weak demand for imported metal into China.

* LME aluminium rose 1.2% to $2,492 a tonne, while ShFE aluminium climbed 2% to 19,810 yuan a tonne. ShFE nickel jumped 2.3% to 131,200 yuan a tonne and LME nickel increased 1.1% to $17,730 a tonne.

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MARKETS NEWS

* Asian share markets turned mixed as data on Chinese retail sales missed expectations though industrial output stayed solid, while more evidence of global inflation pressures helped gold to a three-month peak.

DATA/EVENTS (GMT)

1000 EU Reserve Assets Total April

1600 Russia GDP YY Quarterly Prelim Q1

$1 = 6.4393 yuan Reporting by Mai Nguyen; Editing by Subhranshu Sahu

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