July 17, 2020 / 11:38 AM / 17 days ago

METALS-Copper steady but virus fears and U.S.-China friction weigh

* Copper close to two-year peak

* Analysts see fair price around $6,000

* GRAPHIC-2020 asset returns: tmsnrt.rs/2jvdmXl (Updates copper spread)

By Zandi Shabalala

LONDON, July 17 (Reuters) - Copper hovered near its highest in two years on Friday, supported by supply disruptions, though souring U.S.-China relations and rising coronavirus infections kept gains in check.

Three-month copper on the London Metal Exchange (LME) edged 0.1% higher to $6,455.50 a tonne by 1633 GMT, logging its ninth straight week of gains.

The industrial metal, also seen as a bellwether for economic health, rallied to its highest in nearly 25 months on Monday at $6,633 a tonne on supply worries in top producer Chile.

But analysts say the price might be overheating and see fair value around $6,000 a tonne.

"On the fundamental side, copper has gotten ahead of itself," said Colin Hamilton, managing director of commodities research at BMO Capital Markets.

CORONAVIRUS: The United States shattered its daily record for coronavirus infections on Thursday, reporting more than 77,000 new cases as the number of deaths in a 24-hour period rose by nearly 1,000, according to a Reuters tally.

TRADE TENSIONS: U.S. President Donald Trump's administration was considering a ban on travel to the United States for all members of the Chinese Communist Party and their families.

POSITIONING: Large holdings of copper warrants and cash contracts have fuelled concerns about nearby supply on the LME market. <0#LME-WHC> SPREADS: The concerns can also be seen in the premium for cash copper over the three-month contract, which is at $7 a tonne, compared with a discount of $30 a month ago. CMCU0-3

RIO TINTO: The global miner said that total mined copper production reached 132,800 tonnes in the three months to June 30, beating a consensus forecast of 114,000 tonnes.

OTHER METALS: Aluminium dipped by 0.5% to $1,662 a tonne, zinc fell 1.9% to $2,183, lead lost 2% to $1,821, tin was steady at $17,375 and nickel was down 2% at $13,185. (Reporting by Zandi Shabalala Editing by David Goodman)

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