July 6, 2018 / 5:23 AM / 4 months ago

METALS-Copper set for worst week since November 2015 as tariffs kick in

 (Adds Shanghai closing prices, updates London prices)
    BEIJING, July 6 (Reuters) - London copper recovered
partially from a fresh 11-month low hit earlier on Friday but
was still down for a fifth straight session after U.S. tariffs
on Chinese goods kicked in, escalating the trade spat between
the world's top two economies.
    Copper, seen as a bellwether for economic health, is down 5
percent in London this week, putting it on track for its
steepest weekly drop since the week ended Nov. 20, 2015.
    The United States imposed tariffs on $34 billion of Chinese
imports at 0401 GMT. Beijing has promised to retaliate in kind. 
    The U.S.-China trade dispute "looks like becoming
entrenched" and "comes at a time when copper demand suffers its
seasonal slowdown," ANZ wrote in a note. 
    "However, we feel the market is oversold. Supply disruptions
remain a threat, and shifts in China's consumption patterns will
see demand for refined copper remain strong," it said. 
    "If trade tension subsides, we would expect copper prices to
recovery strongly" in the second half of 2018, ANZ said.
    
    FUNDAMENTALS
    * LME COPPER: Three-month copper on the London Metal
Exchange fell as much as 2 percent to $6,221.50 a tonne,
its lowest since July 25, 2017, before recovering some ground.
It was down 1 percent at $6,282 at 0735 GMT.
    * SHFE COPPER: The most-traded August copper contract on the
Shanghai Futures Exchange dropped as much as 2.2
percent to 48,520 yuan ($7,293.50) a tonne, the lowest since
July 17, 2017, before closing down 1.1 percent at 49,080 yuan.
It shed 4.4 percent this week, the most since September 2015.
    * ESCONDIDA: Negotiations between workers and BHP Billiton
Plc, at the Escondida copper mine in Chile, the
world's largest, are "far from reaching agreement" with less
than three weeks to go before the negotiation deadline, a union
official told Reuters on Thursday.
    * ZINC: Shanghai zinc fell as much as 1.1 percent
before closing up 0.1 percent amid short covering as the market
believes the recent sell-off could be overdone, while London
zinc declined as much as 0.9 percent and is down 6.1
percent this week, the most since April 2016.
    * ALUMINIUM: Shanghai aluminium closed up 0.4
percent as Chinese alumina refiners cut production, while London
aluminium was down 0.2 percent.      
      
    * For the top stories in metals and other news, click       
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    MARKETS NEWS    
    *  Asian stocks bounced back from 9-month lows in volatile
trade on Friday after Washington slapped tariffs on Chinese
imports, a move many investors fear could be the start of a
full-scale trade war between the world's two largest economies.
{MKTS/GLOB]    
        
    
    PRICES
 BASE METALS PRICES                        0731 GMT
 Three month LME copper                      6286.5
 Most active ShFE copper                      49080
 Three month LME aluminium                     2075
 Most active ShFE aluminium                   14005
 Three month LME zinc                          2680
 Most active ShFE zinc                        22050
 Three month LME lead                        2332.5
 Most active ShFE lead                        19680
 Three month LME nickel                       13880
 Most active ShFE nickel                     110970
 Three month LME tin                          19420
 Most active ShFE tin                        143350
                                                   
 BASE METALS ARBITRAGE                             
 LME/SHFE COPPER              LMESHFCUc3     265.29
 LME/SHFE ALUMINIUM           LMESHFALc3    -2015.2
 LME/SHFE ZINC                LMESHFZNc3     588.81
 LME/SHFE LEAD                LMESHFPBc3       16.8
 LME/SHFE NICKEL              LMESHFNIc3    1286.55
 
($1 = 6.6525 Chinese yuan)

    
 (Reporting by Tom Daly; editing by Richard Pullin and
Subhranshu Sahu)
  
 
 
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