October 16, 2018 / 10:58 AM / a year ago

METALS-Copper slips as trade tensions, rising U.S. rates weigh

    * China stocks end lower on lean factory gate inflation
    * GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices)
    By Maytaal Angel
    LONDON, Oct 16 (Reuters) - Copper prices slid on Tuesday
amid lean factory-gate inflation data in China and nagging
concerns about global growth, trade tensions and rising U.S.
interest rates.
    Chinese stocks fell overnight after data showed factory-gate
inflation in the world's top copper consumer had cooled for a
third straight month in September.             
    A degree of calm returned to battered global stock markets,
although caution prevailed given tensions with Saudi Arabia,
trade worries and concerns over a global growth slowdown.
    "Nothing positive has come along. Trade tensions (between
the United States and China) could (go) into next year, oil
prices are up and (U.S.) interest rates are rising," said
William Adams, head of research at Fastmarkets. 
    He added that while copper's supply-side fundamentals are
strong, they will only start driving prices higher once the
macro-economic headwinds subside, which is not on the cards in
the near term.
    PRICES: Three-month copper on the London Metal Exchange
        traded down 1.4 percent in official midday rings to
$6,213 tonne. The red metal has been range-bound since
mid-September but is down 14 percent since its June peak. 
    STEEL: The World Steel Association doubled its 2018 and 2019
forecasts for growth in global demand for the material used in
sectors from cars to construction, but said trade tensions were
clouding the market's outlook.             
    "(Base metals) will continue to see choppy price action
amidst ongoing macro uncertainty, although given the more
bullish micro situation we look at price dips as buying
opportunities," Marex Sepctron said in a note. 
    The broker pointed to low warehouse inventories and said it
is likely that "any ratchet higher in trade tensions (should)
result in China resorting to infrastructure stimulus to support
    COPPER PREMIUMS: Yangshan copper import premiums
SMM-CUYP-CN have been hovering near $120 since late-September,
levels last seen in 2015, indicating strong demand.
    BHP: The world's biggest miner BHP          has nearly
doubled its stake in SolGold Plc         , bolstering its
position against top shareholder Newcrest Mining          as it
eyes SolGold's promising Cascabel copper-gold project in
    POLAND: The Polish government is working on amending tax
laws, which could lead to tax deductions of up to 5 percent on
certain minerals.             
    OTHER METALS: Aluminium         traded down 0.2 percent in
rings at $2,024 a tonne, zinc         traded down 0.1 percent at
$2,597, lead         traded up 0.5 percent at $2,095, tin
        was last bid down 0.5 percent at $19,050 while nickel
        traded down 1.1 percent at $12,480.

 (Additional reporting by Naveen Thukral, editing by David
Evans/Keith Weir)
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