May 1, 2018 / 7:45 AM / a month ago

METALS-London copper drops to three-week low on stronger dollar, China holiday

 (Adds detail, updates prices)
    By Melanie Burton
    MELBOURNE, May 1 (Reuters) - London copper hit its lowest in
three weeks on Tuesday, dampened by a stronger dollar ahead of a
U.S. monetary policy meeting and by a holiday in top metals user
China. 
    Aluminium and zinc prices also came under pressure after the
United States delayed aluminium and steel tariffs for some
countries and announced permanent exemptions for others, raising
the prospect of better metal supply.
    
    FUNDAMENTALS
    * COPPER: London Metal Exchange copper fell to its
weakest in three weeks at $6,752 a tonne, accelerating downwards
after it broke below the 200-day moving average at $6,800, with
the world's top metals buyers absent from the market.  
    * SHFE: The Shanghai Futures Exchange remained closed for a
second day of public holidays, reopening on Wednesday. 
    * COPPER DEMAND: Signals from the physical market were
mixed. Pointing to healthy demand, ShFE copper stocks fell by 18
percent, or more than 50,000 tonnes, over April, while LME
copper set for delivery to consumers jumped by a similar volume.
CU-STX-SGH               
    * But in China's domestic market, physical metal has traded
at a 250 yuan ($39.48) to 400 yuan discount to the ShFE
front-month contract for the past week, the widest in around six
months, suggesting tepid demand for spot metal.  
    * TARIFFS: U.S. President Donald Trump has postponed the
imposition of steel and aluminium tariffs on Canada, the
European Union and Mexico until June 1, and has reached
agreements for permanent exemptions for Argentina, Australia and
Brazil, the White House said on Monday.
    * ALUMINIUM: London aluminium had slipped 0.6
percent to $2,242 a tonne by 0727 GMT, while LME zinc,
used to galvanise steel, fell 0.8 percent to $3,103.50 a tonne.
LME nickel, used by stainless steel makers, climbed 0.2
percent.  
     * RUSAL: U.S. Treasury Secretary Steven Mnuchin on Monday
said the United States was not seeking to put Russian metals
giant Rusal out of business by hitting it with
sanctions, according to an interview with Bloomberg News.

    * For the top stories in metals and other news, click       
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    DATA/EVENT AHEAD (GMT)
    1400  U.S. ISM manufacturing PMI Apr
    1400  U.S.  Construction spending Mar
    U.S. Federal Reserve starts two-day monetary policy meeting
  DATA 
   
 BASE METALS PRICES                    0728 GMT          
 Three month LME copper                            6757.5
 Most active ShFE copper                                0
 Three month LME aluminium                           2242
 Most active ShFE aluminium                             0
 Three month LME zinc                              3103.5
 Most active ShFE zinc                                  0
 Three month LME lead                                2318
 Most active ShFE lead                                  0
 Three month LME nickel                             13660
 Most active ShFE nickel                                0
 Three month LME tin                                21250
 Most active ShFE tin                                   0
 

($1 = 6.3325 Chinese yuan renminbi)

    
 (Reporting by Melanie Burton
Editing by Joseph Radford)
  
 
 
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