September 13, 2019 / 4:15 PM / 2 months ago

METALS-Copper touches 1-1/2 month high on optimism over trade talks

* Lead hits six-month high, nickel falls

* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl (Updates with closing prices)

By Eric Onstad

LONDON, Sept 13 (Reuters) - Copper hit the highest in 1-1/2 months on Friday as investors hoped an easing of trade tensions between the United States and China might eventually boost metals demand.

Prices gained momentum during the session when speculators piled in after key technical levels in copper were breached, including the 100-day moving average, a trader said.

Lead also saw strong gains, hitting the highest in six months.

China will exclude some agricultural products from additional tariffs on U.S. goods, China’s official Xinhua News Agency reported on Friday.

The move came after the two sides made conciliatory gestures on Thursday, such as China renewing purchases of U.S. farm goods and Washington delaying a tariff increase on certain Chinese goods by two weeks.

The prolonged trade war between the world’s two biggest economies has weighed on global growth and the demand outlook for most industrial metals.

“The markets seem to have taken it very well, although it’s hard to get too excited,” said Caroline Bain, chief commodities economist at Capital Economics in London.

“Certainly our U.S. economist is very sceptical that this is going to lead anywhere. We also think the global economy is going to continue to slow over the rest of the year, so we see very little upside for metals prices from here.”

Three-month copper on the London Metal Exchange (LME) gained 2.5% in final open-outcry trading to $5,975 a tonne, the highest since July 30.

Volumes were thinner than usual because the Shanghai Futures Exchange was closed on Friday for the mid-autumn festival. It will resume trading on Monday.

* NICKEL STOCKS: LME nickel fell 1.3% to close at $17,750 a tonne after LME inventories rose 6.6% to 166,680 tonnes, the highest since June 24, easing short-term shortages in LME warehouses.

* NICKEL SPREAD: The premium of LME nickel cash to the three-month contract MNI0-3 had jumped to $163 a tonne by Thursday’s close, the highest since 2009, from $102 a tonne in the previous session, signalling tight nearby supplies.

Traders said shortages had been exacerbated by a dominant position, with one party holding over half of LME inventories and short-term futures. <0#LME-WHT>

* VALE BRAZIL: Also pressuring nickel prices was news that Brazil’s supreme court authorised Vale to restart nickel processing at its Onca Puma operation in Brazil. Activity at the complex was suspended in June.

* INDONESIA COPPER: Indonesia’s energy ministry has approved a new recommendation for a unit of Freeport McMoran Inc to raise copper concentrate exports to 700,000 tonnes until March 2020.

* ALUMINIUM SHORT: The net speculative position for LME aluminium has declined sharply from the recent peak of 31.7% of open interest on Sept. 3 to 6.8% on Wednesday, according to Marex Spectron estimates, the broker’s Alastair Munro said in a note.

* PRICES: LME aluminium added 0.4% to finish at $1,810 a tonne while zinc advanced 1.6% to $2,384, the highest since Aug. 2.

Lead climbed 1.4% to end at $2,106 after hitting $2,118 a tonne, the strongest since March 15, and tin slid 3.8% to $16,475, the biggest one-day fall since July 2.

* For the top stories in metals and other news, click or (Reporting by Eric Onstad; Editing by Louise Heavens and Elaine Hardcastle)

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