October 30, 2019 / 11:43 AM / 7 months ago

METALS-Copper slips as U.S. official warns of trade deal delay

(Updates with closing prices)

By Peter Hobson

LONDON, Oct 30 (Reuters) - Copper prices fell on Wednesday after a U.S. official dampened hopes that a trade deal with China will soon be announced and a big delivery into London Metal Exchange (LME) warehouses pointed to ample supply.

Benchmark copper on the LME ended 0.3% lower at $5,908 a tonne.

The U.S.-China trade dispute has slowed global economic growth, pushing prices of the metal used in power and construction down by 20% since June last year.

Prices are likely to remain little changed until we get some sort of trade deal confirmed, said WisdomTree analyst Nitesh Shah.

TRADE WAR: An interim trade agreement between the United States and China might not be completed in time for signing in Chile next month as expected, a U.S. official said, emphasising that this does not mean the accord is falling apart.

U.S. ECONOMY: Growth in the U.S. economy slowed less than expected in the third quarter.

COPPER STOCKS: Headline stocks in LME-registered warehouses rose by 19,575 tonnes to 270,325 tonnes. Inventories have nearly doubled since the start of the year, suggesting that supply is adequate. MCUSTX-TOTAL

FUNDAMENTALS: The roughly 25 million tonne a year copper market should see a deficit of 320,000 tonnes this year and a surplus of 281,000 tonnes in 2020, the International Copper Study Group (ICSG) said last week.

CHILE DISRUPTION: BHP said its Escondida copper mine, the world's largest, was operating at a "reduced rate" after union workers walked off the job for part of Tuesday.

The strike was in solidarity with an anti-government protest movement across Chile, the world's biggest copper producer, that has so far had limited impact on output.

CHILE OUTPUT: Chile's mining production in September fell because of a drop in copper ore levels and iron production, government data showed on Wednesday.

ALUMINIUM: The discount for cash aluminium over the three-month contract on the LME fell to $3 from more than $30 in mid-September, pointing to tightening nearby supply. MAL0-3

LME aluminium fell 0.3% to $1,760 a tonne after touching a five-week high of $1,763.50.

Aluminum Corp of China reported a 10.4% year-on-year fall in aluminium production for the July-September period to 950,000 tonnes and said sales fell 13.8% to 940,000 tonnes, indicating lacklustre demand in top consumer China.

INDONESIA NICKEL: Indonesia could resume nickel ore exports in one to two weeks once an investigation into violations of export rules is completed, a minister said.

OTHER METALS: LME zinc traded down 0.6% at $2,529 a tonne, nickel edged down 0.3% at $16,780, lead was down 2.5% to $2,208 and tin was down 0.3% to $16,800. (Additional reporting by Mai Nguyen and Tom Daly Editing by Alexandra Hudson and David Goodman)

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