Industrial metals claw back ground after worst day in 3 years

LONDON: Industrial metals prices regained ground on Thursday as planned trade talks between China and the United States rekindled appetite for riskier assets and weakened the dollar.

Concerns that trade disputes and a currency crisis in Turkey will damage economic growth and metals demand had triggered a run of losses which culminated on Wednesday with the London Metal Exchange's (LME) index of six metals plunging to a 13-month low in its worst one-day fall since July 2015.

But Thursday's fillip was likely to be short-lived, said Commerzbank analyst Daniel Briesemann.

Although metals were underpriced, he said, the bearish mood among investors reinforced by trade tensions and emerging market currency weakness was still in control.

"The sentiment and macro issues are clearly to the downside," he said.

COPPER: Benchmark copper on the LME traded up 1.7 percent at $5,897 a tonne in official rings after falling 4 percent and touching a 15-month low of $5,773 on Wednesday.

ZINC/LEAD/NICKEL: LME zinc did not trade but was bid up 2.1 percent at $2,348 a tonne after a 6.3 percent fall on Wednesday. Lead was bid 5.1 percent higher at $2,025 after losing 7.1 percent the day before, and nickel traded up 2.7 percent at $13,190 after a 4.3 percent tumble on Wednesday.

GLOBAL MARKETS: World shares and emerging market currencies were fighting to regain their footing after China said it will hold trade talks with the United States later this month and Turkey's lira continued to recover.

DOLLAR: The dollar, whose march to 13-month highs has piled pressure on metals by making them more expensive for buyers with other currencies, moved lower, with China's yuan one of the major gainers against it.

CHINA ECONOMY: China is the world's largest consumer of metals. An apparent cooling of its economy and uncertainty over trade are also undermining the outlook for metals demand.

CHINA INFRASTRUCTURE: Attempting to keep its economy humming, China almost quadrupled the value of fixed-asset investment projects approved in July.

CHINA METALS OUTPUT: China's zinc production fell in July to the lowest since 2013, while output of copper, lead and alumina rose.

CHILE STRIKES: A potential support for copper prices appeared gone after the world's largest copper mine, Chile's Escondida, said it had reached a deal with workers threatening strike action. That came after another strike at the smaller Caserones mine in Chile was averted.

OTHER METALS: Aluminium traded unchanged at $2,025 a tonne after falling 2.2 percent on Wednesday. Tin was bid 1.3 percent higher at $18,650 following a 3.2 percent fall the day before.