May 14, 2019 / 4:36 AM / 2 months ago

METALS-Copper rebounds on bargain buying; zinc spread hits 22-yr high

 (Adds milestones, quotes, details, and updates prices)
    By Mai Nguyen
    SINGAPORE, May 14 (Reuters) - Copper prices rose on Tuesday
on bargain buying after having tumbled to a 15-week low in the
previous session on heightened trade tensions between Beijing
and Washington.
    China said on Monday it would impose higher tariffs on most
U.S. imports on a revised $60 billion target list, hitting back
at a U.S. tariff increase on $200 billion worth of Chinese
goods, just days after markets were expecting a trade deal.
                         
    Benchmark copper         was up 0.7% at $6,049.50 a tonne,
as of 0747 GMT, rebounding from a 15-week low hit in the
previous session. Lead         also rebounded from a 33-month
low hit on Monday to rise 0.5%.
    "The selloff has been a little overdone so I suspect there's
a bit of opportunistic buying. But the upside is limited for the
moment until there is some sort of clarity around the trade
agreement between the U.S. and China," said Daniel Hynes, a
senior commodity strategist at ANZ.
    The premium of cash zinc over the 3-month contract MZN0-3
hit its highest since 1997 of $141 on Monday, signalling a lack
of nearby supply.
    "Some (Chinese) smelters are still under utilised. Output is
beginning to increase month on month but it's still not
efficient for the market," said CRU's analyst Dina Yu based in
China.
    The zinc market is further stressed ahead of the expiry of
the prime prompt date this week, with a dominant position holder
of LME zinc warrants, LME data shows. <0#LME-WHL>
    However, zinc prices in the second half of 2019 are expected
to drop as Chinese smelters' output will increase further in the
second half of this year. Meanwhile, the U.S.-China trade war
will hurt demand, CRU's Yu said.
    
    FUNDAMENTALS
    * COPPER STOCKS: Copper inventories in warehouses approved
by the London Metal Exchange (LME) MCUSTX-TOTAL on Friday hit
203,750 tonnes, its lowest since April 25, latest data showed.
    * COPPER DEFICIT: The copper market should see a deficit of
189,000 tonnes this year, widening to 250,000 tonnes in 2020,
the International Copper Study Group said on Monday.
            
    * NICKEL WEST: Global miner BHP Group                will
keep its Nickel West operations in Australia amid increasing
demand for materials used to make batteries, its chief executive
said.             
    * PRICES: Three-month aluminium on the LME         rose
0.8%, nickel         edged up 0.1%, zinc         advanced 0.9%
and tin         increased 0.2%.
    * SHANGHAI: All base metals in Shanghai dropped, with the
most-active copper contract          closing down 0.5% at 47,490
yuan ($6,903.12) a tonne.
    * TRADE TALKS: China and the United States both have the
"ability and wisdom" to reach a trade deal that is good for
both, China's top diplomat said, as U.S. President Donald Trump
said he thought recent talks in Beijing would be successful.
            
    * For the top stories in metals and other news, click       
          or             
        
    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 = 6.8795 Chinese yuan)

    
 (Reporting by Mai Nguyen; Additional reporting by Melanie
Burton; Editing by Shreejay Sinha and Sherry Jacob-Phillips)
  
 
 
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