March 8, 2017 / 3:04 AM / 4 months ago

METALS-London copper bounces from near five-week low, China data eyed

4 Min Read

    * LME copper stocks rise by a third in March
    * Nickel prices to ease in 2017 as Indonesia resumes
exports-BMI
    * Nickel weakened on concerns of Philippine mining ban
reversal
    * Coming Up: China trade data at 0200 GMT

 (Adds comment, detail, updates prices)
    By Melanie Burton
    MELBOURNE, March 8 (Reuters) - London copper climbed on
Wednesday as traders took profit on short positions ahead of
China trade data, after large inventory flows into exchange
warehouses sent prices to a five-week low.
    London Metal Exchange copper stocks have surged by a third
in the past week to the highest since late January at 262,000
tonnes, raising concerns over demand in Asia. 
    "We think price consolidation in the metals space is short
term as metals, especially copper and nickel, continue to face
supply uncertainties while demand across the globe is getting
more visible led by China and US," Argonaut Securities said in a
report. 
    Three-month copper on the London Metal Exchange         was
up 0.4 percent at $5794 a tonne by 0239 GMT, paring 1.5 percent
losses from the previous session. Prices on Tuesday fell to
$5,759 a tonne, the weakest since Feb 3.
    Shanghai Futures Exchange copper          was down 1 percent
to 47150 yuan  ($6,831) a tonne. Earlier in the session, prices
hit their lowest in a month at 46,910 yuan a tonne. 
    Copper prices have been underpinned by mine disruptions in
Chile, Peru and Indonesia, with prospects of labour unrest to
carve more deeply into a deficit expected for this year.
    UBS Wealth Management sees agreements covering some 17
percent of mine supply being renegotiated this year. 
    In a positive sign for metals' demand outlook, Japan's gross
domestic product growth was revised up in the fourth quarter as
capital expenditure grew at the fastest pace in almost three
years.             
    In news, bankers and stock markets are signalling an
upcoming wave of mergers and acquisitions among small and
mid-sized miners, but financiers worry that companies have not
learned from costly mistakes made in the last commodity boom.
            
    In other metals, LME nickel held steady at $10,640, just
above a two-week low, after a sharp 4 percent drop on Tuesday on
expectations Philippines may soften mine closure plans, while
Shfe nickel          was down 3 percent.
    BMI expects refined nickel prices to ease over a
three-to-nine month horizon, as Indonesia resumes exports and as
major nickel mines in the Philippines, the world's top producer,
manage to maintain exports. 
    "Although environmental policies in the Philippines have
threatened the closure of up to 20 nickel mines, we remain
confident that there will not be any significant output declines
in the Philippines in 2017 compared to 2016 as most major miners
will avoid the regulatory crackdown."
    Philippine President Rodrigo Duterte said on Tuesday he
hopes there will be a "happy compromise" between the mining
industry and protecting the environment.             
        
       
    
    
    PRICES    
    Three month LME copper                  
    Most active ShFE copper                  
    Three month LME aluminium               
    Most active ShFE aluminium               
    Three month LME zinc                    
    Most active ShFE zinc                    
    Three month LME lead                    
    Most active ShFE lead                    
    Three month LME nickel                 
    Most active ShFE nickel                   
    Three month LME tin                     
    Most active ShFE tin                             
    

   ($1 = 6.9025 Chinese yuan)

 (Reporting by Melanie Burton; Editing by Sherry Jacob-Phillips)
  
 
 

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