April 12, 2019 / 3:37 AM / 2 months ago

METALS-Copper rebounds on lower dollar; nickel drops

(Adds China data, updates prices)

By Mai Nguyen

SINGAPORE, April 12 (Reuters) - London copper rose on Friday on a weaker U.S. dollar, while nickel contracts in both London and Shanghai dropped despite analysts' warnings of supply shortages.

The dollar fell against a basket of major currencies on Friday, making it cheaper for buyers using other currencies to purchase greenback-denominated metals.

Three-month copper on the London Metal Exchange was up 0.6 percent at $6,444.50 a tonne, as of 0720 GMT, while the most active Shanghai copper contract fell 0.2 percent to 49,280 yuan ($7,335.30) a tonne.

London nickel fell 0.5 percent, after declining 1.9 percent in the previous session in its biggest drop in four weeks. The contract has been the best performer among base metals on the LME, supported by low inventory.

Shanghai nickel dropped 2.2 percent.

The global nickel market will face grave supply shortages unless key Chinese-led projects in Indonesia come online in a timely manner, analysts said on Thursday.

"Fundamentals continue to support nickel prices in view of the rebound of Chinese stainless steel production in March, low SHFE inventory and inherent supply deficits of nickel sulphates due to low production," said analyst Helen Lau of Argonaut Securities in a note on Friday.


* NICKEL STOCKPILES: LME nickel inventory MNISTX-TOTAL continued to hover around its lowest level since 2013, while on-warrant nickel inventory in warehouses tracked by ShFE SNI-TOTAL-D stayed around its lowest since 2015.

* BYD: Chinese electric car and battery maker BYD Co Ltd , worried about nickel supply, said it welcomed joint ventures to secure supply of the metal used to make batteries for electric vehicles.

* CHINA DATA: China's exports rebounded in March but imports shrank for a fourth straight month and at a sharper pace, painting a mixed picture of the economy as trade talks with the United States reach their endgame.

* PRICES: Other London metals rose slightly after China released its trade data, but most Shanghai metals ended lower.

London lead edged up 0.1 percent, but was still on track for its sixth straight weekly decline on concern that weak auto sales would dampen demand for car batteries.

* UPSIDE: "We believe (base metal) prices will witness limited upside in the coming weeks, unless a U.S.-China trade deal is finally struck, as concerns over global growth continue," said Fitch Solutions in a note Friday. "Nevertheless non-ferrous metal prices remain elevated in the year-to-date and we expect them to head higher from spot as we move into H219 on the back of robust demand from China," it said.

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Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 6.7182 Chinese yuan)

Reporting by Mai Nguyen; Editing by Richard Pullin and Sherry Jacob-Phillips

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