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METALS-London copper edges up on Chilean supply worries

(Adds Shanghai closing prices, updates London prices)

HANOI, May 17 (Reuters) - London 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.

“Supply side issues may be back in focus” after the rejection of a final wage offer, ANZ said in a note.

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 0.6% to $10,296.50 a tonne by 0717 GMT, while the most-traded June copper contract on the Shanghai Futures Exchange gave up modest gains early in the session to close down 0.1% at 74,750 yuan ($11,609) a tonne.

FUNDAMENTALS

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

* China’s aluminium production in April rose to a monthly record high of 3.35 million tonnes, official data showed, after a relaxation of output curbs in Inner Mongolia boosted supply.

* LME aluminium was up 0.6% at $2,477 a tonne, while ShFE aluminium closed up 1.4% at 19,700 yuan a tonne. ShFE nickel ended up 2% at 130,790 yuan a tonne and LME nickel was up 1% at $17,720 a tonne. Lead was the top performer on the LME, gaining 1.3% to $2,182 a tonne.

MARKETS NEWS

* Asian share markets turned mixed on Monday as Chinese retail sales missed expectations and Singapore moved to close schools to fight a coronavirus outbreak.

$1 = 6.4388 Chinese yuan renminbi Reporting by Mai Nguyen; additional reporting by Tom Daly; Editing by Subhranshu Sahu

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