August 20, 2018 / 10:36 AM / 3 months ago

METALS-Copper rises on hopes of U.S.-China trade progress

* Copper up 1.1 pct after hitting 14-month low last week

* Metals demand also supported by weaker dollar

* GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl (Adds closing prices, weaker dollar)

By Zandi Shabalala

LONDON, Aug 20 (Reuters) - Copper edged higher on Monday, bouncing back from its third straight week of losses in a sign of market optimism over planned trade talks between China and the United States and a view that the recent decline in metals was overdone.

Benchmark copper on the London Metal Exchange (LME) ended 1.1 percent up at $5,991.50 a tonne, having hit a 14-month low last week as investors were spooked by a crash in the Turkish lira and the potential impact on metals of a U.S.-China trade war.

“The rise today could be investors positioning ahead of the talks between China and the U.S. They (investors) could be thinking it’s a good sign and the risk of a full-blown trade war will be averted,” said Capital Economics commodities economist Simona Gambarini, adding that last week’s fall was overdone.

DOLLAR: A weaker dollar boosted demand for commodities.

SUPPLY: The union representing workers of Chilean copper mine Escondida signed a new collective labour contract on Friday, ending the risk of a strike that could have paralysed the world’s biggest copper mine.

COPPER STOCKS: Inventories of copper in China, at 155,076 tonnes in warehouses monitored by the Shanghai Futures Exchange, have halved since a 2018 peak in March. CU-STX-SGH

In LME warehouses, on-warrant stocks available to the market rose slightly to 223,200 tonnes. MCUSTX-TOTAL

CHINA CREDIT: China’s banking and insurance regulator has asked financial institutions to give more support to infrastructure investment, importers, exporters and creditworthy companies experiencing temporary problems.

INVESTORS: Hedge funds and money managers trimmed their net short position in copper futures and options, data from the U.S. commodities regulator showed on Friday.

ALUMINIUM: Global primary aluminium output rose to 5.472 million tonnes in July from a revised 5.334 million tonnes in June, data from the International Aluminium Institute showed on Monday.

OTHER METALS: Aluminium rose 1.2 percent to 2,055 a tonne, also helped by the prospect of trade talks. Zinc shed 0.5 percent to $2,377.50 while lead ended 0.8 percent down at $1,972.50, tin added 0.5 percent to $18,800 and nickel advanced by 0.5 percent to $13,560.

Additional reporting by Melanie Burton Editing by Jane Merriman and David Goodman

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