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Copper drifts to 1-week low as US-China tensions rekindled

LONDON: Copper fell to its lowest level in a week on Wednesday after comments by US President Donald Trump stoked more w

Dec 05 2018

LONDON: Copper fell to its lowest level in a week on Wednesday after comments by US President Donald Trump stoked more worries about trade tensions with top metals consumer China.

Most other industrial metals were in the red due to concern about growth in China and after the country's currency slipped.

Markets were unconvinced when China expressed confidence on Wednesday that it could reach a trade deal with the United States, after Trump renewed warnings that he would revert to more tariffs if the two sides cannot resolve their differences.

"We're seeing a bit of red, mainly to do with Trump's comments about liking tariffs, plus the renminbi weakened after having strengthened during the past several days, that basically did the damage," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

"Copper touched the upper end of its range but failed to break above yesterday and then the tariff talk sent it lower."

Three-month copper on the London Metal Exchange was down 0.6 percent at $6,172 a tonne by 1110 GMT after touching $6,142, the lowest since Nov. 28.

The most-active contract on the Shanghai Futures Exchange lost 1.2 percent to 49,350 yuan ($7,189) a tonne.

* ZINC: LME benchmark zinc was the only LME metal in positive territory, rising 0.4 percent to $2,600 a tonne, underpinned by shortages in the refined sector that have whittled down inventories.

"The speculative short in zinc is one of the smaller shorts of the complex at 4.4 percent of open interest," Alastair Munro at broker Marex Spectron said in a note.

* ZINC STOCKS: LME zinc inventories fell further to 110,700 tonnes, down more than half since mid-August to the lowest since January 2008.

* STEEL: China's construction steel rebar jumped more than 4 percent after hitting a seven-and-a-half-month low in the previous session, providing support to steel-linked metals zinc and nickel. LME nickel was unchanged at $11,140 a tonne.

* BHP/NICKEL: BHP received approval from the local Australian government to develop the Venus nickel mine that will feed its Nickel West battery chemicals business.

* CHINA SERVICES: China's services sector grew at its quickest pace in five months in November thanks to an uptick in new orders, a private survey showed, although the outlook for businesses over the next year worsened for the third month.

* US DOLLAR: The greenback edged up on Wednesday, putting further pressure on London metals which are traded in dollars, as the commodities became more expensive for holders of other currencies.

Copyright Reuters, 2018