February 28, 2019 / 7:33 AM / 7 months ago

METALS-Copper falls after China PMI miss; set for best month since Dec 2017

 (Adds Shanghai closing prices, updates London prices)
    BEIJING, Feb 28 (Reuters) - Copper prices moved lower on
Thursday as ultra-tight stocks were overshadowed by a
contraction in China manufacturing and a U.S. warning that it
was too early to predict the outcome of trade talks with
Beijing.  
    Factory activity in China shrank for the third straight
month in February, with the country's official Purchasing
Manager's Index falling to a three-year low of 49.2, missing the
49.5 forecast in a Reuters poll of analysts.
    Physical demand for copper, widely used in manufacturing,
"has certainly slowed down... particularly in the
semi-fabrication sector and also with some consumers rolling
forward physical deliveries," Malcolm Freeman, director of
Kingdom Futures, said in a note.
    Copper is nonetheless on course to rise 4.9 percent in
February amid supply concerns and earlier optimism over the
trade talks, which would mark its best month since December
2017.
           
    FUNDAMENTALS
    * COPPER: Three-month copper on the London Metal Exchange
 was down 0.6 percent at $6,469 a tonne at 0717 GMT. The
most-traded copper contract on the Shanghai Futures Exchange
 closed up 0.1 percent at 50,160 yuan ($7,507.75)
    * COPPER STOCKS: On-warrant LME copper inventories
MCUSTX-TOTAL available to the market currently stand at just
23,650 tonnes and are "literally down to a few hours worth of
global consumption," Freeman said. "Without doubt metal is out
there but just not in the LME system," he added.
    * TRADE: U.S. issues with China are "too serious" to be
resolved with promises from Beijing to purchase more U.S. goods
and any deal between the two countries must be include a way to
ensure commitments are met, U.S. Trade Representative Robert
Lighthizer said.
    * OTHER METALS: Most of the LME complex was lower, with zinc
 also down 0.6 percent at $2,728 a tonne and only nickel
, up 0.1 percent, gaining ground. Shanghai aluminium
 closed down 0.2 percent but ended February 1 percent
higher, clocking its first monthly rise since August.
    * BHP: BHP Group Ltd, the world's biggest miner,
announced a raft of management changes on Thursday, in line with
its "transformation agenda" led by Chief Executive Andrew
Mackenzie.
    * CODELCO: Chile's Chuquicamata underground copper mine is
due to start operations in middle of this year, state copper
miner Codelco's chairman said.
    * For the top stories in metals and other news, click       
 or     
        
    MARKETS NEWS    
    * Asian stocks fell as investors dialled back some of their
recent optimism about a Sino-China trade deal while news that
the U.S.-North Korean summit in Hanoi was ending early rattled
confidence late in the trading day.    
        
    PRICES
 BASE METALS PRICES                      0719 GMT
 Three month LME copper                    6469.5
 Most active ShFE copper                    50160
 Three month LME aluminium                 1917.5
 Most active ShFE aluminium                 13675
 Three month LME zinc                        2728
 Most active ShFE zinc                      21745
 Three month LME lead                      2134.5
 Most active ShFE lead                      17360
 Three month LME nickel                     13065
 Most active ShFE nickel                   102650
 Three month LME tin                        21510
 Most active ShFE tin                      150510
                                                 
 BASE METALS ARBITRAGE                           
 LME/SHFE COPPER             LMESHFCUc3     -1.97
 LME/SHFE ALUMINIUM          LMESHFALc3  -1083.35
                                         
 LME/SHFE ZINC               LMESHFZNc3    -17.35
 LME/SHFE LEAD               LMESHFPBc3    211.04
 LME/SHFE NICKEL             LMESHFNIc3    230.36
                                         
 
($1 = 6.6811 Chinese yuan renminbi)

    
 (Reporting by Tom Daly; Editing by Joseph Radford and Rashmi
Aich)
  
 
 
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