July 29, 2019 / 3:59 AM / 22 days ago

METALS-Base metals mixed ahead of trade talks as pessimism limits gains

(Updates prices)

By Mai Nguyen

SINGAPORE, July 29 (Reuters) - Industrial metals on the London Metal Exchange were mixed on Monday ahead of planned U.S.-China trade talks, with gains capped by a cautious view on the outcome of the discussion.

Trade negotiators from the United States and China will meet in Shanghai this week for a two-day discussion aimed at resolving the year-long trade war between the world's two biggest economies.

U.S. President Donald Trump has offered a pessimistic view on reaching a deal, saying Beijing may try to delay reaching a trade deal until the 2020 election.

Three-month copper on the London Metal Exchange (LME) rose in early Asian trading, but later retreated 0.1% to $5,957.50 a tonne by 0701 GMT, and nickel fell 1% while aluminium was up 0.1% and zinc rose 0.4%.

"Uncertainty remains elevated amidst recurring periods of de-escalation and re-escalation in tensions .... We expect the U.S.-China trade war to remain for now," said Fitch in a report.

FUNDAMENTALS

* SHANGHAI PRICES: The most-traded copper contract on the Shanghai Futures Exchange (ShFE) ended down 0.3% to 46,900 yuan ($6,807.26) a tonne and aluminium also dipped 0.2% while zinc rallied 1.4%.

* ZINC: The difference between cash and three-month zinc on the LME CMZN0-3 flipped to a premium, indicating a nearby supply shortage, while stockpiles in LME and ShFE held at low levels MZNSTX-TOTAL ZN-STX-SGH.

* "We noticed that recently treatment charge started to decline and stainless steel price start to increase. This, combined with sharp decline in exchange inventories on LME and ShFE, leads us to review our prior bearish stance toward zinc prices," Argonaut Securities' analyst Helen Lau said.

* CHINA IMPORTS: China's imports of refined zinc in June jumped 56.8% from the same time last year to 56,878 tonnes, but copper cathodes imports in the period dropped 30.8% from a year earlier to 212,328 tonnes, official data showed.

* CHINA: Profits earned by China's industrial firms contracted in June after a brief gain the previous month, fuelling concern that a slowdown in manufacturing from a bruising trade war will drag on economic growth.

* ARSENIC COPPER: Glencore has started a new copper concentrates blending facility in Taiwan to mix clean material with ores containing high levels of arsenic, three sources familiar with the matter said.

* ALUMINIUM: United Company Rusal reported a 21% rise in second quarter aluminium sales compared to the previous quarter, as the Russian aluminium giant's recovery from 10 months under U.S. sanctions accelerated.

* 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 = 6.8897 Chinese yuan renminbi)

Reporting by Mai Nguyen; Editing by Richard Pullin and Shounak Dasgupta

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