April 5, 2019 / 10:54 AM / 2 months ago

METALS-Zinc up on shortages, others mixed on U.S.-China uncertainty

* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl (Updates with closing prices)

By Eric Onstad

LONDON, April 5 (Reuters) - Zinc prices gained on Friday on concerns about short-term shortages, but other industrial metal prices were mixed due to uncertainty about any U.S.-China trade deal.

While metals had been boosted earlier by U.S. President Donald Trump's comments on Thursday that the two countries were close to a trade deal, on Friday Trump said he did not want to predict a deal would be reached and a White House adviser said issues still remained.

Volumes were light, with Chinese participants away and the Shanghai Futures Exchange (ShFE) closed for the Tomb Sweeping Day holiday. It will reopen on Monday.

Analyst Carsten Menke at Julius Baer in Zurich was not convinced that any U.S. deal with top metals consumer China would lift the market.

"If you make the call that with the trade talks China will do better in the future, then the economy will need less stimulus. Even if we get a deal, which I think is quite likely, I wouldn't expect any major lift in industrial metals demand," he said.

"For me, it's really no game changer. I see both aluminium and copper well supplied going forward."

Zinc is the second best performing metal on the London Metal Exchange this year behind nickel, up 18 percent as rising supply from mines has faced bottlenecks in being processed into metal.

Benchmark LME zinc rose 0.9 percent in open outcry trading to close at $2,922 a tonne.

* ZINC/COPPER SPREADS: The premium of LME cash zinc over the three-month contract CMZN0-3 was at $59 a tonne, near the peak of $76.75 touched a week ago, which was the strongest since early January, indicating near-term shortages in the LME system.

LME cash copper, on the other hand, has deepened its discount against the three-month contract CMCU0-3 to $15.75 a tonne, the biggest discount since early February, showing healthy supplies, compared with a premium of $70 in early March.

* COPPER STOCKS: Copper stockpiles in LME-approved warehouses MCUSTX-TOTAL remained at high levels on Friday after having surged this week, climbing to the highest in six months and nearly double the level three weeks ago.

Copper inventories at warehouses tied to the ShFE remained near a nine-month high. CU-STX-SGH

LME copper finished down 0.8 percent at $6,401 a tonne.

* NORSK HYDRO: Production at Norwegian aluminium maker Norsk Hydro was back to near normal after a cyber attack last month, the company said on Friday.

* PRICES: Three-month LME aluminium shed 0.3 percent to $1,890 a tonne, nickel was bid up 0.2 percent at $13,120, lead closed down 0.4 percent at $1,986 and tin fell 0.4 percent to $21,000.

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Additional reporting by Mai Nguyen in Singapore and Peter Hobson in London Editing by David Evans and Louise Heavens

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