September 16, 2019 / 4:32 AM / a month ago

METALS-LME copper slips from 1-1/2-mth high on weak China data

(Adds details, updates prices)

By Mai Nguyen

SINGAPORE, Sept 16 (Reuters) - Most base metals dropped on Monday, with London copper shedding as much as 1.3%, on increasing signs of slowing demand in top consumer China.

Data released earlier on Monday showed China’s industrial production grew at the weakest pace in 17-1/2 years last month and fixed-asset investment in January-August increased at a slightly lower rate than expected.

“This implies that the government should do more stimulus instead of scaling back,” said analyst Helen Lau of Argonaut Securities.

China is the biggest user of copper, which is used widely in power, construction and consumption.

Three-month copper on the London Metal Exchange (LME) fell as much as 1.3% to $5,897 tonne, after hitting a 1-1/2-month high in the previous session. Prices were down 1.1% as of 0704 GMT.

“Base metals rose recently because markets expected the U.S.-China trade talks will be good overall, but when the reality kicked in, they realised that kind of expectation should be trimmed back,” Lau said.

Chinese Premier Li Keqiang said it is “very difficult” for the world’s second-largest economy to grow at a rate of 6% or more, after a 6.3% expansion in the first half of the year.

The most-traded copper contract on the Shanghai Futures Exchange (ShFE) rose 0.7% to 47,560 yuan ($6,727.78) a tonne, tracking LME copper’s gains on Friday. Chinese markets were closed on Friday for the Mid-Autumn festival.

FUNDAMENTALS

* CODELCO: Prices of copper will remain depressed through next year due to continued uncertainty caused by global trade tensions, local media on Friday cited top copper producer Codelco’s chief executive officer, Octavio Araneda, as saying.

* PRICES: LME tin rose 2.1%, aluminium eased 0.1%, lead edged up 0.1% and zinc advanced 0.3%. In Shanghai, tin dropped 2.9%, aluminium fell 1% while lead declined 0.2%.

* CHINA ALUMINIUM: China’s primary aluminium output in August fell 0.5% from the previous month to 2.97 million tonnes, official data showed, as unexpected outages at two key smelters dented production.

* TIN SPREAD: The difference between LME cash to three-month tin contract CMSN0-3 flipped to discount after staying in the premium zone for six straight sessions, signalling that nearby supplies have become less tight.

* TIN: Malaysia Smelting Corp Berhad, the world’s third-largest refined tin producer, does not expect its output to fall this year even though the top two producers have flagged output cuts, its chief executive said.

* NICKEL PRICES: LME nickel ended down 2.9% while ShFE nickel settled down 2.9% in its biggest drop since December 2017.

* NICKEL: LME nickel headline inventories MNISTX-TOTAL rose to 166,680 tonnes, their highest in 2-1/2 months, while the premium of LME cash nickel over the three-month contract MNI0-3 dropped to $59 a tonne from $163 previously.

* ALUMINIUM: A sharp fall in Japanese physical premiums for fourth-quarter shipments is the latest sign that aluminium is not immune from the demand weakness that is sapping the industrial metals complex.

* U.S.-CHINA: China will exempt some agricultural products from additional tariffs on U.S. goods, the latest sign of easing Sino-U.S. tensions before a new round of talks.

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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 = 7.0692 Chinese yuan renminbi) (Reporting by Mai Nguyen; Editing by Subhranshu Sahu and Jason Neely)

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