SINGAPORE: Zinc headed gains in most industrial metals on the Shanghai Futures Exchange (ShFE) on Thursday, as investors eyed ongoing trade talks between the world's top two economies.
Sino-U.S. trade talks made "good headway" last week in Beijing, White House economic adviser Larry Kudlow said, and President Donald Trump will meet on Thursday with Chinese Vice Premier Liu He, who is in Washington for the talks.
"Things are progressing towards some good results. Even though we don't know what it is exactly, but there's a little bit more clarity on the U.S. and China trade talks," said analyst Helen Lau of Argonaut Securities.
Media reports touted progress in the trade talks , while upbeat data on the Chinese services sector released on Wednesday also kept sentiment positive, Lau said.
"China's economy is geared to more consumption based development. If the service side is healthy, that will of course help stabilise the Chinese domestic economy," she added.
On the London Metal Exchange (LME), most base metals retreated by midday from earlier gains.
The market appears set for a pause as recent rallies were mostly fuelled by positive macro sentiment rather than strong fundamentals, said a Singapore-based trader.
FUNDAMENTALS
* ShFE: Shanghai zinc jumped to as high as 23,275 yuan ($3,467) a tonne, its highest since March 2018, while copper rose 0.5 percent by 0351 GMT, aluminium advanced 0.2 percent and nickel gained 0.6 percent.
* LME: Benchmark copper eased 0.1 percent to $6,486 a tonne, nickel dipped 0.3 percent after posting its strongest jump in three weeks in the previous trading day, while aluminium edged up 0.1 percent.
* ZINC STOCKS: Zinc inventory in LME-approved warehouses <MZNSTX-TOTAL> was still hovering near its lowest level since at least 1998. However, Shanghai zinc inventory <SMM-ZN-SHG> was still solid, having fallen only 18 percent since mid-March after surging 276 percent in less than three months.
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