July 9, 2018 / 5:19 AM / 3 months ago

METALS-Copper snaps back from one-year low as dollar slips

(Adds detail, updates prices)

By Melanie Burton

MELBOURNE, July 9 (Reuters) - London copper rebounded on Monday from a near one-year low hit in the session before, as a weak dollar forced short holders to cover positions amid simmering trade war tensions.

“Chinese data has been weak following an extended period of tightening, and the threat of escalating trade wars is not helpful,” said Jefferies in a report.

“Slow global demand growth and increasing supply constraints should lead to tighter markets heading into 2019. Copper continues to be our preferred commodity, especially after the recent weakness.”

FUNDAMENTALS

* COPPER: London Metal Exchange copper rallied 1.8 percent to $6,392 by 0759 GMT after prices slumped to $6,221.50 a tonne on Friday, which was the weakest since late July 2017. Shanghai Futures Exchange copper also rebounded, rising 1.5 percent to 49,990 yuan ($7,552) a tonne.

* BACKWARDATION: There is still huge tightness between the July-August copper contract, suggesting shorts may have to deliver into warehouses in the next week if they can. July is trading at an $11 premium against August. MCUN18-Q18

* Other LME metals were around 1-2 percent higher from Friday except for LME zinc which had dropped by 0.7 percent to $2716 a tonne.

* U.S. ECONOMY: The U.S. economy created more jobs than expected in June, but steady wage gains pointed to moderate inflation pressures that should keep the Federal Reserve on a path of gradual interest rate increases this year.

* TRADE WARS: The global economy is starting to show signs of strain from the “America First” push of U.S President Donald Trump who will hear renewed pleas to step back from a broader trade war when he visits Europe in the coming week.

* TRADE WARS: Wall Street has taken the China-U.S. tariffs enacted on Friday in its stride so far, but investors are on alert for a ramp-up in the trade conflict.

* MINE WAGE TALKS: Labor negotiations at BHP Billiton Plc Escondida copper mine in Chile, the world’s largest, are entering into the final three weeks before a 30-month contract expires at the end of July.

* BLOCKCHAIN: Online metal concentrates exchange Open Mineral is seeking to build a consortium of mining companies and financial institutions to create a blockchain system for minerals trading and logistics.

* CHINA ECONOMY: China’s broad economic growth was expected to ease to around 6.6 percent in the second half of this year, the State Information Center said on Saturday.

* 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

ARBS ($1 = 6.6195 Chinese yuan)

Reporting by Melanie Burton; editing by Richard Pullin and Sunil Nair

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