July 31, 2018 / 4:39 AM / 5 months ago

METALS-Copper shrugs off strike fears, set for worst month since 2016

 (Adds Shanghai closing prices, updates London prices)
    BEIJING, July 31 (Reuters) - Copper fell for a second day on
Tuesday as the prospect of imminent strike action at BHP's
Escondida mine in Chile, the world's largest, again failed to
drive prices higher.
    The union at Escondida is expected to overwhelmingly reject
the final contract offer from the Anglo-Australian miner,
increasing the likelihood of a strike, a union leader told
Reuters on Monday.
    London Metal Exchange copper is on course for a 6.1 percent
drop in July, which would mark its steepest monthly fall since
August 2016, having been driven down by fears that a Sino-U.S.
trade war will hurt demand for industrial metals. 
    Guy Wolf, global head of market analytics at Marex Spectron,
said the copper price's failure to react to the prospect of a
strike shows that the market has grown numb to such supply fears
after so much uncertainty over the trade war saga.
    "You think back a year ago, how eagerly that kind of news
would be leapt on by the bulls and now it's ignored," said Wolf.
    
    FUNDAMENTALS
    * COPPER: Three-month LME copper was down 0.5
percent at $6,217 a tonne as of 0717 GMT, while the most-traded
September copper contract on the Shanghai Futures Exchange
 closed down 0.2 percent at 49,830 yuan ($7,301.42) a
tonne.
    * CHILE: Workers at Codelco's            Chuquicamata copper
mine in Chile, the state miner's second largest by output,
walked off the job on Monday morning and blocked access to the
mine, union leaders said, in a move criticized as "illegal" by
Codelco.
    * ZINC: Three-month zinc on the LME shrugged off an
early dip to trade up 0.2 percent at $2,563 but is still down
10.2 percent in July, on course for its steepest monthly drop
since October 2012. Shanghai zinc closed up 0.5 percent
at 21,405 yuan a tonne, tracking steel prices higher.
    * CHINA: China's official Purchasing Managers' Index (PMI)
released on Tuesday fell to 51.2 in July, from 51.5 in June, but
remained above the 50-point mark that separates growth from
contraction for the 24th straight month.    
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    MARKETS NEWS    
    * Global bond prices gained and the yen fell on Tuesday
after the Bank of Japan (BoJ) wrongfooted hawks as it pledged to
keep interest rates extremely low for an extended period.
    
        
      
    PRICES
 BASE METALS PRICES                         0720 GMT
 Three month LME copper                       6220.5
 Most active ShFE copper                       49820
 Three month LME aluminium                      2082
 Most active ShFE aluminium                    14540
 Three month LME zinc                         2566.5
 Most active ShFE zinc                         21400
 Three month LME lead                           2152
 Most active ShFE lead                         18490
 Three month LME nickel                        13875
 Most active ShFE nickel                      113000
 Three month LME tin                           20060
 Most active ShFE tin                         147950
                                                    
 BASE METALS ARBITRAGE                              
 LME/SHFE COPPER              LMESHFCUc3      703.25
 LME/SHFE ALUMINIUM           LMESHFALc3    -1839.66
 LME/SHFE ZINC                LMESHFZNc3      833.58
 LME/SHFE LEAD                LMESHFPBc3      724.41
 LME/SHFE NICKEL              LMESHFNIc3     1787.18
    

($1 = 6.8247 Chinese yuan renminbi)

    
 (Reporting by Tom Daly; editing by Eric Meijer and Richard
Pullin)
  
 
 
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