April 10, 2020 / 5:36 AM / 3 months ago

METALS-Shanghai copper posts best week in nearly 2 years on China demand recovery signs

 (Updates prices, milestones; adds inventory data)
    By Tom Daly
    BEIJING, April 10 (Reuters) - A strong rally in Friday
afternoon trade pushed Shanghai copper prices to a more than
three-week high and their biggest weekly gain in 22 months, on
signs of a recovery in demand from top consumer China and
tightening supply across the globe.
    The metal rose 3.7% for the week, recording its third
straight weekly gain as well as its biggest jump since the week
ended June 8, 2018. However, it was down 17.1% for the year,
weighed down by the novel coronavirus crisis.
    Demand in China fell first due to the virus "but
infrastructure projects there are now being pulled forward,
factories are restarting, construction activity is picking up,
traffic congestion is increasing and pollution is increasing,"
Jefferies said in a note. 
    "This all suggests that demand in China is clearly improving
from a very low base," the brokerage said, adding that the early
demand shock could now switch to "a more substantial supply
shock."     
    A total of 2.4 million tonnes of annual copper capacity - or
12% of global mine supply - has been temporarily shut due to
virus-related curbs, Jefferies estimates. 
    The London Metal Exchange is closed on Friday and will
remain shut on April 13 on account of Easter Monday.
   
    FUNDAMENTALS
    * COPPER: The most-traded May ShFE copper contract
rose as much as 2.6% in the afternoon session to 41,890 yuan
($5,957.92) a tonne, its highest since March 17, before closing
at 41,790 yuan.
    * CHINA DATA: China's factory gate prices in March fell 1.5%
year-on-year, the sharpest decline in five months.
    * SMELTERS: China's copper cathode output rose 2.6%
month-on-month in March, research house Antaike said.

    * MINERS: MMG Ltd has declared force majeure on
copper concentrate supplies from its Las Bambas mine in Peru,
four sources said.
    * TRADE: China's foreign trade faces unprecedented
challenges due to the virus that has spread to more than 200
countries, its assistant commerce minister said.
    * OTHER METALS: ShFE base metals were higher across the
board, with nickel and tin tracking Thursday's
gains in London to their highest levels since mid-March. They
closed up 2.3% and 3.4%, respectively. 
    Aluminium ended up 1.8% after touching its highest
since March 20, while zinc closed up 0.3% and lead
 added 1%.
    * STOCKS: Copper inventories in ShFE warehouses CU-STX-SGH
fell 4.4% from the previous week to 317,928 tonnes, the exchange
said. Lead stocks PB-STX-SGH slipped 3.8% to 8,326 tonnes, the
lowest since November 2018.
    
    PRICES    
 BASE METALS PRICES                       CLOSE
 Most active ShFE copper                  41790
 Most active ShFE aluminium               11845
 Most active ShFE zinc                    15660
 Most active ShFE lead                    13835
 Most active ShFE nickel                  97310
 Most active ShFE tin                    126410
       
($1 = 7.03098 Chinese yuan)

 (Reporting by Tom Daly; Editing by Subhranshu Sahu and Arun
Koyyur)
  
 
 
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