October 31, 2019 / 5:26 AM / 17 days ago

METALS-Copper steady as weak Chinese data counters supply concern

(Updates prices)

By Mai Nguyen

SINGAPORE, Oct 31 (Reuters) - London copper was steady and Shanghai copper eased on Thursday as China data pointed to weak demand while worries of supply disruption in Chile, the world’s biggest producer, lent some support.

Factory activity in China, the world’s biggest consumer of the metal, shrank for the sixth straight month in October, pointing to further pressure on its manufacturers as they grapple with the weakest economic growth in nearly 30 years.

China’s purchasing managers’ index (PMI) fell to 49.3 in October, versus 49.8 in September. Economists polled by Reuters had expected the reading to be unchanged from September.

“PMI number below market expectation shows that headwinds facing China’s economy are still there. Going forward there will be slowing demand as China enters into winter time,” said Argonaut Securities analyst Helen Lau.

Three-month copper on the London Metal Exchange (LME) fell 0.3% in early Asian trading hours before firming to stand virtually flat at $5,907 a tonne by 0716 GMT.

The benchmark contract is on track for its biggest monthly gain since February, supported by supply disruptions in Chile.

Mining operations in Chile are facing delays in supplies, travel disruptions and workers walking off to join nationwide protests, in what is the biggest political crisis since 1990 for the South American nation.

The most-traded copper contract on the Shanghai Futures Exchange (ShFE) fell 0.4% to 47,330 yuan ($6,726.36) a tonne.

FUNDAMENTALS

* PRICES: LME aluminium declined 0.3% to $1,754 a tonne, zinc dropped 1.3% to $2,495 and lead was down 0.4% at $2,199.50.

ShFE aluminium edged up 0.1% to 13,840 yuan a tonne, zinc fell 0.6% to 18,995 yuan, lead lost 0.6% to 16,600 yuan and nickel advanced 0.3% to 133,700 yuan.

* TRADE TALKS: A summit in Chile where U.S. President Donald Trump said he hoped to sign an interim trade deal with his Chinese counterpart Xi Jinping has been cancelled because of violent protests. Officials from both the countries still expressed optimism on reaching an initial trade agreement next month.

* RATES: The U.S. Federal Reserve cut interest rates on Wednesday for the third time this year to help sustain U.S. growth but signalled there would be no further reductions unless the economy takes a turn for the worse.

* CHILE: Chile’s manufacturing production dropped 1.5% in September from the same month last year amid a 5.4% decrease in mining output.

* TRIMET: Germany’s Trimet Aluminium plans to return aluminium production to full capacity next year after reductions in 2019, with demand from the automobile sector expected to be strong, an executive board member said.

* PERU COPPER: Peru has given the green light for Southern Copper Corp’s much-delayed Tia Maria copper mine, but the government cautioned it would not move ahead with the project without the right social and environmental conditions being met.

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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 = 7.0365 Chinese yuan renminbi) (Reporting by Mai Nguyen Editing by David Goodman )

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