July 9, 2019 / 4:40 AM / 8 days ago

METALS-Copper extends losses amid lacklustre China demand

(Updates prices)

By Mai Nguyen

SINGAPORE, July 9 (Reuters) - Copper prices on the London Metal Exchange declined on Tuesday, poised for a third consecutive drop, on worries of lean demand from China, the world's biggest consumer of the red metal.

Three-month copper on the London Metal Exchange was down 0.3% at $5,876 a tonne, as of 0714 GMT, while the most-traded copper contract on the Shanghai Futures Exchange touched a three-week low of 46,110 yuan ($6,703.20) a tonne before rebounding slightly and ended down 0.4% at 46,190 yuan.

Investors were worried about the drop in demand for copper, often used as a gauge of economic health, amid a prolonged U.S.-China trade war and its subsequent damage to global growth and demand.

Copper prices have dropped about 20% since last June when the trade war heightened, but some investors are bearish even beyond the impact of the dispute, citing an expected slowdown in China, the world's second-biggest economy.

"Even without the trade war, China growth has already slowed down. Chinese people buy less cars ... less air conditioners," said a Hong Kong-based metals trader.

"Even though the Chinese government's stimulus plan is in place, there has not been much demand materialised," the trader said, adding that some major trading houses reported negative copper cathode consumption growth in the first half of the year.

Meanwhile, the United States and China are set to re-launch trade talks this week after a two-month hiatus, but there is little sign their differences have narrowed.

FUNDAMENTALS

* COPPER STOCKPILES: Copper inventories in LME-approved warehouses are hovering around a one-year high, having surged 24% so far in July to 298,300 tonnes on Friday, latest data showed. MCUSTX-TOTAL

* COPPER SPREAD: The discount between the LME copper cash and three-month contract CMCU0-3 hovered around a two-week high at $17.95 a tonne, indicating ample nearby supply.

* CHINA PREMIUM: China's Yangshan premium SMM-CUYP-CN rose at the beginning of July when China started restricting more copper scrap imports, but the rise was marginal, suggesting weak copper demand in China, the Hong Kong-based trader said.

* COPPER TCs/RCs: China's Jiangxi Copper Co and Tongling Nonferrous Metals Group have signed treatment and refining charges deals with Chilean miner Antofagasta for the first half of 2020 at $64-$70 a tonne and 6.4-7 cents a pound, sources said.

* PRICES: London aluminium eased 0.1%, nickel dropped 0.8% and zinc fell 0.2%. Shanghai aluminium dipped 0.2%, nickel advanced 0.7% and zinc tumbled 1.3%.

* NEW METAL CONTRACTS: Hong Kong Exchanges and Clearing on Monday launched dollar-denominated and monthly cash-settled contracts - London Metal Mini Futures - for aluminium, zinc, copper, nickel, tin and lead mini, which will start trading on Aug. 5.

* GLENCORE IN CONGO: Congolese soldiers fired in the air on Monday as illegal miners protested outside a metallurgical plant on a copper and cobalt concession run by Glencore, a witness said.

* 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 = 6.8788 Chinese yuan)

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

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