May 17, 2019 / 4:47 AM / a month ago

METALS-Copper heads for 5th week of decline amid U.S.-China trade tension

(Updates prices, adds details, recasts)

By Tom Daly and Mai Nguyen

BEIJING/SINGAPORE, May 17 (Reuters) - Copper prices on the London Metal Exchange are on track to fall for a fifth straight week, as deepening U.S.-China trade tensions sparked concerns about weak demand.

After a series of tariff hikes by the world’s two biggest economies, the United States on Thursday added Chinese telecom giant Huawei Technologies Co Ltd to a blacklist, making it extremely difficult for it to do business with U.S. firms.

On Friday, a front-page commentary in a major Chinese news outlet run by the ruling Communist Party described China’s determination to protect its national interests.

“The trade war can’t bring China down. It will only harden us to grow stronger,” the People’s Daily wrote.

Benchmark copper on the London Metal Exchange fell 1% to $6,041 a tonne at 0701 GMT, while aluminium edged down 0.6%, nickel fell 0.7%, zinc decreased 1% and lead edged 0.8% lower.

Despite easing on Friday, London aluminium is on track for its best week of gains since Feb. 22 as alumina refinery shutdowns in China raised production costs for the metal and sparked worries about supply shortages.

“The aluminium market remains tight. We estimate it was in a deficit of around 1 million tonnes in 2018, with ongoing supply issues likely to deepen this deficit this year,” ANZ said in a note, adding demand from China is showing signs of recovery.

FUNDAMENTALS

* SHANGHAI PRICES: Shanghai copper fell 0.3%, while aluminium decreased 0.3%, zinc was 0.8% lower and tin fell 0.6%.

* ALUMINA: Alumina prices in northern China SMM-ALM-NCHN have now exceeded 3,000 yuan a tonne as of Thursday and touched their highest since Dec. 10, latest data showed.

* CHINA: Prior to the shutdowns, China’s alumina output rose 4.2% y/y to 6.28 million tonnes in April, according to data released on Thursday. The figure is the highest monthly total on records on the bureau’s website since June 2017.

* BATTERY METALS: Japanese miner and smelter Sumitomo Metal Mining Co Ltd (SMM) aims to more than double its production capacity of cathode materials used in batteries for automobiles by March 2028, its president said.

* STIMULUS HOPES: Large stimulus measures from China in response to an escalation in the Sino-U.S. trade war would eventually drive metals prices higher, Wall Street bank Goldman Sachs said.

* COPPER: Polish mining company KGHM may produce more copper than planned at its Sierra Gorda mine in Chile in 2019, while keeping capital expenditure below target, a senior executive said.

* For the top stories in metals and other news, click or

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

Reporting by Tom Daly; editing by Gopakumar Warrier and Richard Pullin

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