November 22, 2018 / 2:37 AM / a month ago

METALS-Copper prices drop as U.S.-China trade war threatens growth

SINGAPORE, Nov 22 (Reuters) - Copper prices edged down on Thursday, shedding some of previous session’s gains on worries over slowing global economic growth amid an escalating trade war between Washington and Beijing.

Trade tensions and higher interest rates are slowing the global economy, though for now there are no signs of a sharp downturn, the Organisation for Economic Cooperation and Development (OECD) said, lowering outlook for next year to 3.5 percent from a previously projected 3.7 percent.

The United States and China clashed on Wednesday at a World Trade Organization (WTO) meeting with a U.S. envoy accusing Beijing of using the WTO to pursue “non-market” policies and a Chinese official saying it was Washington that was flouting the rulebook.

FUNDAMENTALS

* Three-month copper on the London Metal Exchange was down 0.1 percent at $6,229.50 a tonne, as of 0223 GMT, while the most-traded copper contract on the Shanghai Futures Exchange edged up 0.2 percent to 49,510 yuan ($7,146.26) a tonne.

* Expectations of a supply avalanche have been hitting the nickel market next year due to new capacity in Indonesia, but analysts doubt the plans spearheaded by Chinese firms can be carried out so quickly.

* Nickel stockpiles on the Shanghai Futures Exchange SNI-TOTAL-D edged down to 14,911 tonnes on Wednesday, but still near a three-month high. However, nickel stockpiles on the LME warehouse MNISTX-TOTAL is still below a five-year low.

* The most traded nickel contract on the Shanghai Futures Exchange lost 1.5 percent to 91,000 yuan a tonne, trading around a 11-month low level, while London’s three-month nickel contract edged down 0.1 percent.

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MARKETS NEWS

* Asian shares stepped ahead cautiously on Thursday while oil rebounded from a steep sell-off, though rising U.S. interest rates and escalating trade tensions kept financial markets on edge amid signs of slackening global growth.

DATA AHEAD (GMT)

0745 France Business climate manufacturing Nov

1500 Euro zone Consumer confidence flash Nov

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

ARBS

($1 = 6.9281 Chinese yuan)

Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips

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