October 17, 2018 / 10:56 AM / 2 months ago

METALS-Copper steady on Chinese data, aluminium falls on stock inflow

(Updates with closing prices)

By Peter Hobson

LONDON, Oct 17 (Reuters) - Copper prices held steady on Wednesday as better than forecast Chinese lending data signalling solid economic growth in the world's biggest metals consumer was offset by signs that a supply squeeze in China was receding.

Aluminium meanwhile fell after a second day of large inflows of metal into London Metal Exchange warehouses.

"For copper, on the macro side, the (Chinese) data was slightly better than expected, so that's a positive," said Deutsche Bank analyst Nick Snowdon.

"But on the physical side (there are) slightly softer signals in terms of Chinese import demand in the near term," he said.

COPPER: Benchmark copper on the London Metal Exchange (LME) closed down 0.1 percent at $6,219 a tonne.

RANGE-BOUND: Copper has been locked between around $6,100 and $6,350 since late September. Fears that a U.S.-China trade dispute would weaken demand helped push prices to a 14-month low of $5,773 in August.

SPREAD: Cash copper on the LME, which earlier this month was trading at the largest premium over the three-month contract since June 2016 MCU0-3, is now trading at a discount of $3, signalling a slackening of demand for nearby metal.

Analysts said that reflected a lessening of need for metal in China after a recent shortage.

Yangshan copper import premiums SMM-CUYP-CN have also dipped from 3-year highs. China's copper imports surged in September, which may have satisfied immediate demand, Deutsche's Snowdon said.

ALUMINIUM: LME aluminium ended down 0.6 percent at $2,022 a tonne after headline stocks in LME-registered warehouses surged from 926,100 tonnes to 1,082,600 tonnes in two days. MALSTX-TOTAL

The inflows did not reflect a change in supply-demand fundamentals, said a person at a metals-trading bank in London. "This is a shuffle between on- and off-warrant stocks," he said.

SMELTER SHUTDOWNS: Aluminium prices barely moved after Alcoa said on Wednesday it would close two aluminium plants in Spain with combined annual production of 180,000 tonnes.

CHINA DATA: Chinese banks extended 1.38 trillion yuan ($199.25 billion) in net new yuan loans in September, more than analysts had expected and up from the previous month.

CHINA STIMULUS: China has stepped up economic stimulus in recent months to counter any negative effect from a trade dispute with the United States.

In the latest steps, its central bank is increasingly expected to cut bank reserve requirements next year and its state planner approved a high-speed railway project worth 36.8 billion yuan ($5.3 billion).

OTHER METALS: LME zinc finished up 2.3 percent at $2,665 a tonne, nickel closed down 1.8 percent at $12,375, lead slid 0.9 percent to $2,047 and tin ended down 0.7 percent at $19,075. (Additional reporting by Muyu Xu and Dominique Patton; Editing by Elaine Hardcastle and David Evans)

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