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METALS--Shanghai, London metals skid on N.Korea tensions, China credit jitters
September 22, 2017 / 7:57 AM / 2 months ago

METALS--Shanghai, London metals skid on N.Korea tensions, China credit jitters

 (Adds detail and updates prices)
    By Melanie Burton
    MELBOURNE, Sept 22 (Reuters) - Metals in Shanghai and London
tumbled on Friday as investors slashed risk given escalating
tensions on the Korean peninsula and ongoing jitters about China
debt after a ratings downgrade. 
    "Metals have had quite a rally in the past few months and
have done so much faster than fundamentals would suggest they
should," said analyst Amy Li of National Australia Bank in
Melbourne.
    A combination of factors had led to the sell-off, Li said,
among them, rising geo-political tension with North Korea,
expectations for a more aggressive interest rate rise cycle in
the United States, and to a smaller extent, the ongoing credit
concerns in China.
    "I would say this is a pullback from the very, very bullish
position we have seen in the past few months."     
    
    FUNDAMENTALS
    * SHFE: In Shanghai, metals slumped between 1 percent and 6
percent, with the steepest tumble in nickel, which hit limit
down as higher trading fees on the Shanghai Futures Exchange
(ShFE) came into play.
    * LME: In London, lead and nickel both
plunged 4 percent. Investors had surged into metals on prospects
of resilient China demand and environmental curbs that have cut
into supply. LME zinc and aluminium both fell by
more than 2 percent.
    * LME COPPER: LME copper tumbled to its lowest since
Aug. 16, touching $6,366 a tonne, before trimming losses to
$6,409, as of 0740 GMT.
    * SHFE COPPER: The most-active ShFE copper futures
slid 1.5 percent to 49,630 yuan ($7,532) a tonne.
    * CONFUSION: "Not sure why so aggressive a move, guess the
U.S. sanctions, delayed reaction in metals to FOMC," said one
trader in Hong Kong. "Confused markets I have to say, and on top
of that trying to get out of risk when its all one way only
exacerbates the move and creates deeper moves in ever decreasing
liquidity."
    * N. KOREA: China called on all parties on Friday to
exercise restraint after North Korea's foreign minister was
quoted as saying he believes the North could consider conducting
a hydrogen bomb test in the Pacific Ocean.
    * CHINA CREDIT: S&P Global Ratings downgraded China's
long-term sovereign credit rating on Thursday, less than a month
ahead of one of the country's most sensitive political
gatherings, citing increasing risks from its rapid build-up of
debt.
    * CHINA FACTORIES: Thousands of small factories in China,
making everything from steel to chemicals, are scrambling for
access to the country's clogged rail network as Beijing curbs
the use of diesel trucks in an effort to tackle air pollution.

    * MACQUARIE: Australia's Macquarie Group Ltd has
overtaken Goldman Sachs to break into the top three banks for
commodities business, having significantly expanded its U.S.
energy operations in recent years while rivals cut back.
        
    * COMING UP: Germany Markit Mfg PMI flash Sep at 0730 GMT   
    PRICES    
 
                                  0731 GMT         
 Three month LME copper                      6409.5
 Most active ShFE copper                      49610
 Three month LME aluminium                     2130
 Most active ShFE aluminium                   16400
 Three month LME zinc                          3028
 Most active ShFE zinc                        24675
 Three month LME lead                        2419.5
 Most active ShFE lead                        20225
 Three month LME nickel                       10565
 Most active ShFE nickel                          0
 Three month LME tin                          20440
 Most active ShFE tin                        144180
                                                   
                                                   
 LME/SHFE COPPER             LMESHFCUc3      255.44
 LME/SHFE ALUMINIUM          LMESHFALc3       86.28
 LME/SHFE ZINC               LMESHFZNc3      866.12
 LME/SHFE LEAD               LMESHFPBc3      284.56
 LME/SHFE NICKEL             LMESHFNIc3     1791.62
 

($1 = 6.5894 Chinese yuan)

    
 (Reporting by Melanie Burton; Editing by Christian Schmollinger
and Sherry Jacob-Phillips)
  
 
 

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