Zinc, copper dip as inventories rise; China data lifts others

LONDON: Copper and zinc slipped on Thursday after inventories rose, indicating supplies were healthy, while other metals were supported by strong manufacturing data in top metals consumer China.

Zinc inventories in warehouses certified by the London Metal Exchange jumped 7 percent in one day to 245,750 tonnes, the highest since November. They have also surged 84 percent since late February.

"There's certainly inventory out there and with a more restrained import appetite into China so far this year, it's not surprising that you've see some metal showing up in LME warehouses," said Nicholas Snowdon, metals analyst at Deutsche Bank in London.

"Overall, however, the trends in the zinc market have been quite encouraging in China over the past few weeks, namely stock draws and the import arb opening up," he added.

Other metals gained after data in China showed its vast manufacturing sector grew at the fastest pace in eight months in May, blowing past expectations and easing concerns about an economic slowdown.

"The macro and metals data we've seen out of China over the course of May has been on the positive side, providing a clear balance to the negative macro risks that have developed ex-China," Snowdon added.

* ZINC: LME benchmark zinc failed to trade in official open outcry activity and was bid down 0.7 percent at $3,107 a tonne, pulling back from a one-month high of $3,189.50 after the LME stocks data was released.

* COPPER STOCKS: LME copper on-warrant inventories - those stocks not earmarked for delivery - jumped 19 percent in one day to 226,675 tonnes.

* COPPER: LME copper eased 0.1 percent to trade at$6,823 a tonne in official rings, off an intraday peak of $6,895.50.

* COPPER SPREADS: LME time spreads in copper had been tightening, with the discount of the cash contract to three-month futures moving to $9.50 a tonne by Wednesday's close from a $34.75 discount on May 21.

The move was a result of investors covering short spread positions, Alastair Munro at broker Marex Spectron said in a note.

* NICKEL: LME nickel, the best performing LME metal this year, was bid up 0.5 percent at $15,205 a tonne, the highest since April 19.

The most-traded July nickel contract in Shanghai closed up 2.5 percent at 114,820 yuan ($17,933.62) a tonne, having earlier touched 114,870 yuan, its highest level since May 2015.

"Nickel in particular has returned to favour with investors, as the dynamics of weak supply growth amid signs of stronger demand from the (electric vehicle) market has spurred buying," ANZ wrote in a note.

* PRICES: LME aluminium traded up 0.7 percent at $2,285 a tonne in official activity, lead gained 1 percent to trade at $2,458 and tin was bid up 0.6 percent to $20,700.