BEIJING: London copper prices steadied on Friday, after two days of modest gains, as China's factory-gate price growth missed expectations and investors awaited the outcome of Sino-U.S. trade talks in Beijing.
China's producer price inflation slowed for a seventh straight month in January to its weakest pace since September 2016, raising concerns the world's top copper consumer may see the return of deflation as domestic demand cools.
Copper is on course for a 1.2 percent drop this week, which would be its first weekly fall since the week ended Jan. 4.
Key catalysts for a price rebound would be progress in the trade talks and signs of economic recovery in China, Helen Lau,an analyst at Argonaut Securities in Hong Kong, said in a note.
China's January copper import numbers, released on Thursday,reflected a "rather encouraging outlook in copper demand, especially as inventory in the domestic market is winding down,"she added.
FUNDAMENTALS
* LME COPPER: Three-month copper on the London Metal Exchange was flat at $6,135.50 a tonne, as of 0733 GMT. The most-traded April copper contract on the Shanghai Futures Exchange ended down 0.3 percent at 48,200 yuan ($7,112.82) a tonne.
* TRADE: China has pledged to end market-distorting subsidies for its domestic industries but offered no details on how it would achieve that goal, according to three people familiar with the U.S.-China trade talks in Beijing this week.
* NICKEL: The metal used to make stainless steel fell 0.3 percent in London and was on course to shed 3.2 percent over the week, the most since November, as a rally driven by fears Vale's tailings dam disaster in Brazil would affect its nickel production faded. ShFE nickel closed down 2 percent after hitting a two-week low.
* NICKEL: Further easing supply fears, Australian ferronickel miner South32 has agreed to a four-year contract with two unions at its Cerro Matoso mine in Colombia, avoiding a strike over pay and other benefits.
* ZINC: The metal used to galvanise steel was the top performer in London, rising as much as 1.7 percent, its biggest gain in two weeks.
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MARKETS NEWS
* Asian stocks fell, retreating from four-month highs after data out of China raised concerns over deflationary pressures building in the world's second biggest economy.
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