May 17, 2019 / 10:42 AM / 3 months ago

METALS-Escalating trade war drives copper to fifth weekly loss

(Updates with closing prices)

By Peter Hobson

LONDON, May 17 (Reuters) - Copper prices fell for a fifth consecutive week as the trade confrontation between the United States and China intensified.

Investors fear the dispute will damage economic growth and weaken the outlook for metals demand, with industrial metals prices down sharply from last summer when it began.

Benchmark copper on the London Metal Exchange (LME) did not trade in closing rings on Friday but was bid down 0.7% at $6,055 a tonne.

The metal used in power and construction has lost around 1.2% this week and is trading near Monday's 3-1/2 month low of $6,007.50.

Harsher trade rhetoric from Washington and Beijing was pushing prices lower, Societe Generale analyst Robin Bhar said, adding that copper's solid fundamentals meant prices were likely to recover to around $6,500 by the end of the year.

TRADE WAR: China struck a more aggressive tone in its trade war with the United States on Friday, suggesting a resumption of talks between the world's two largest economies would be meaningless unless Washington changed course.

MEXICO/CANADA: Media reported that Washington was close to a deal to remove tariffs on steel and aluminium imports from Canada and Mexico.

TARIFFS: The White House said it was delaying a decision on whether to impose tariffs on imported cars and parts for as long as six months.

GLOBAL MARKETS/DOLLAR: European and Chinese stock markets fell and the dollar was near two-year highs against a basket of major currencies, making metals more expensive for non-U.S. buyers.

YUAN: China's yuan has slumped around 3.5 percent against the dollar since mid-April. China is the world's largest consumer of metals.

CHINA PREMIUMS: Chinese copper import premiums at $47 are down from $120 in October and the lowest in two years. SMM-CUYP-CN

NICKEL: Cash nickel on the LME flipped to a $21 premium against the three-month contract early on Friday, the highest since 2011, before dropping back to a discount of $11. MNI0-3

Cash zinc traded at a discount of around $80 at the start of May. The change suggests there is less immediately available metal.

Headline stocks of nickel in LME-registered warehouses meanwhile slipped to 164,400 tonnes, the lowest since March 2013. MNISTX-TOTAL

LME nickel was not included in the closing ring session but was down 1.3% at $12,015 a tonne in electronic trading.

ZINC: The premium of cash zinc over the three-month contract was at $150.50 after rising to the highest in more than 20 years. MZN0-3

Zinc prices finished down 1.4% at $2,600 a tonne.

OTHER METALS: LME aluminium ended down 1.2% at $1,837 a tonne, lead fell 0.6% to $1,826 a tonne and tin closed up 0.2 percent at $19,500 a tonne.

Reporting by Peter Hobson; Additional reporting by Tom Daly; editing by Louise Heavens and Alexander Smith

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