Copper dips as trade battle seen harming global growth

Copper fell to a one-week low on Wednesday on rising concerns about the health of the global economy as the US-China trade row showed no signs of abating, weighing on demand for metals.

The International Monetary Fund said the trade conflict between the United States and China would cut 2019 global growth to its slowest since the 2008-2009 financial crisis, but said output would rebound if tariffs were removed.

The warning comes after the world's two largest economies made little progress in negotiations last week, prolonging a row that has unnerved financial markets and sapped demand for metal.

"The initial excitement about a possible trade deal has calmed down and the market has realised that getting a deal will be much more complicated," said Natixis analyst Bernard Dahdah.

Three-month copper on the London Metal Exchange (LME) closed 0.7% lower at $5,730 a tonne, having declined by a similar margin in the previous session.

A Reuters poll showed China's economic growth is expected to slow to a near 30-year low this year and cool further in 2020, even as it steps up stimulus.

US President Donald Trump on Wednesday said he was not likely to sign any trade deal with China until he met Chinese President Xi Jinping at the APEC Forum in Chile.

On-warrant copper inventories in LME-approved warehouses rose by 7,950 tonnes to 211,875, the highest since Sept. 19.

Copper miner Antofagasta PLC reached a labour agreement with a union of supervisors at its flagship Los Pelambres mine in Chile, easing supply concerns.

In Peru, the government authorised the intervention of the armed forces and police to unblock access to one of the country's largest copper mines, after owner Chinese miner MMG Ltd said it may have to cease production at the site.

ING bank analysts said mine supply disruptions from South America could tighten the market over the fourth quarter but prices would likely be dictated by demand, given the softer economic environment and uncertainty.

The LME will raise its trading and clearing fees 8% from January 2020, its first increase in five years to fund new projects and keep up with inflation.

Nickel shed 3.2% to $16,420 a tonne, its lowest for more than six weeks. Headline stocks of nickel on the LME fell to their lowest since January 2012 to 91,062 tonnes.

The disconnect between physical nickel market weakness and exchange tightness "presents a major downside risk to prices, alongside the global growth risks, and we continue to see nickel price risks as skewed to the downside", said analysts at Citi.

LME aluminium was unchanged $1,728 a tonne, zinc slipped 0.2% to $2,434, lead added 0.5% higher to $2,160, tin was bid up 0.9% to $16,850.

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