October 14, 2019 / 5:23 AM / a month ago

METALS-Copper ticks up on trade progress, but caution limits gains

(Updates prices, adds quotes)

By Mai Nguyen

SINGAPORE, Oct 14 (Reuters) - Copper prices rose on Monday on signs of progress in U.S.-China trade talks and supply disruptions in parts of South America, but gains were capped by disappointing Chinese import/export data and caution about prospects for a final trade deal.

U.S. President Donald Trump on Friday outlined the first phase of a deal to end a trade war with China and suspended a threatened tariff hike on Oct. 15, raising hopes of an easing in the 15-month dispute that has hurt global growth and metals demand.

Copper was also supported by news that Chinese miner MMG Ltd might halt production at its Las Bambas copper mine in Peru where protesters are blocking access to the site.

In Chile, operations at a copper mine belonging to Canadian miner Teck Resources Ltd will be suspended as workers start a strike on Monday and workers at small Antucoya, a small copper mine owned by Antofagasta Minerals, are also set to go on strike on Wednesday.

Copper's gains were limited, however, as U.S. and Chinese officials said much more work was needed before an accord could be agreed, while demand for the metal remained subdued.

The most-traded copper contract on the Shanghai Futures Exchange ended up 0.1% at 46,970 yuan ($6,650.71), having risen as much as 0.6% during Asian trading hours.

Benchmark copper on the London Metal Exchange (LME) was little changed by 0713 GMT, reversing an earlier 0.5% rise.

"Despite the recent progress on the deal, trade tensions between China and the United States are unlikely to end completely and risks are likely to linger in the next phase of negotiations," ANZ analyst Soni Kumari said.

"Against such a backdrop, the market will be considering (China's) upcoming hard economic data more seriously than news on the trade deal," Kumari added.

FUNDAMENTALS

* CHINA TRADE: China's unwrought copper imports in September stood at 445,000 tonnes, while the country exported 435,000 tonnes of unwrought aluminium and aluminium products in the same month.

* Kumari said weaker imports of primary copper reflected subdued activity in the manufacturing sector, while weaker aluminium exports were due to narrowing margins and better availability of the metal outside of China. "Weaker industrial activities are impacting the demand for (aluminium) as well," he added.

* CHINA: A slide in China's exports picked up pace in September while imports contracted for a fifth straight month, pointing to further weakness in the economy and underlining the need for more stimulus as the trade war drags on.

* YUAN: Progress in the trade talks helped the yuan strengthen, making U.S. dollar-priced metals cheaper for holders of the Chinese currency, potentially boosting demand for LME base metals.

* CHINA OUTPUT: September refined copper cathode output by 22 Chinese smelters rose 1.7% month-on-month to 737,000 tonnes, while refined zinc and zinc alloy production increased by 1.5% in September from the previous month to 453,000 tonnes, research house Antaike said.

* PRICES: LME aluminium fell 0.1%, tin advanced 0.7% while nickel was down 1.4% and lead declined 1.5%. In Shanghai, tin rose 0.6% while aluminium decreased 0.7% and zinc fell 0.3%.

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PRICES

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 = 7.0624 Chinese yuan renminbi) (Reporting by Mai Nguyen; Editing by Shounak Dasgupta, Rashmi Aich, Kirsten Donovan)

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