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METALS-Copper dips as supply fears ease but heads for second quarterly gain
March 31, 2017 / 9:58 AM / 9 months ago

METALS-Copper dips as supply fears ease but heads for second quarterly gain

 (Updates with closing prices)
    By Jan Harvey
    LONDON, March 31 (Reuters) - Copper fell more than 1 percent
on Friday as the end of a strike at Peru's biggest copper mine
dampened fears of reduced supply that had driven the metal
higher this quarter, though upbeat economic data from China lent
    Workers at Freeport-McMoRan Inc's Cerro Verde
facility will resume work on Friday after voting to end a near
three-week strike that had halved output, the union said late on
    The re-start of the mine coincides with the Escondida mine
in Chile resuming operations, ING said in a note, while there
were signs that restrictions on supply from Freeport-McMoRan's
Grasberg facility in Indonesia were also set to ease.
    "Supply issues are evaporating," Commerzbank analyst Daniel
Briesemann said.
    "Overnight the latest news out of Peru is that the strike at
the Cerro Verde mine has come to the end. Two days ago we had
news that there might be a solution at Grasberg, and before
that, Escondida resumed production. So I think the major
(supply) issues are almost done."
    LME COPPER: London Metal Exchange copper closed down
2 percent at $5,837.50 a tonne, though prices still rose 5.6
percent in the first quarter, following a near 14 percent rise
in the previous three months.
    CHINA MANUFACTURING: Activity in China's manufacturing
sector unexpectedly grew at its fastest pace in nearly five
years in March, adding to evidence that the world's
second-largest economy has gained momentum early this year, an
official report showed on Friday.
    FREEPORT INDONESIA: Freeport-McMoRan Inc's Indonesian unit
is close to reaching a deal that would allow the world's biggest
publicly listed copper producer to temporarily resume
concentrate exports, Indonesia's mining minister said on
    CODELCO: Chile's state copper company Codelco produced 1.83
million tonnes of copper in 2016, of which 1.71 million tonnes
came from its wholly-owned mines, down 1.4 percent from a year
ago, the company said. 
    TECHNICALS: LME copper may fall to the next support at
$5,774 after breaking the $5,855 a tonne level, Reuters
technical analyst Wang Tao said, as its bounce from the March 9
low of $5,652 has completed.
    ALUMINIUM: LME aluminium closed down 0.5 percent at
$1,962.50 a tonne, but still posted its biggest quarterly gain
in 6-1/2 years, up nearly 16 percent. The metal hit its highest
since December 2014 on Thursday ahead of the Chinese
manufacturing data.
    FUNDS: Copper and zinc are the two standouts among a
brightening outlook for base metals, with supply constraints and
China-driven demand set to lift prices in coming months, U.S.
commodity hedge fund Blenheim Capital Management said.

    STOCKS: Copper stocks held in LME warehouses MCU-STOCKS,
which have been declining for almost two straight weeks, fell
another 6,375 tonnes on Thursday to 291,175 tonnes, exchange
data showed. However, they remain well above their March 2 low
of 196,425 tonnes. 
    DOLLAR: The dollar surrendered early gains to trade little
changed on Friday as a Federal Reserve official's seemingly
dovish remarks and uninspiring data on the U.S. economy doused
the sanguine mood from earlier this week.
    OTHER METALS: LME nickel ended the day down 1
percent at $10,030, while tin closed 0.1 percent higher
at $20,175 a tonne. Zinc finished the day down 3.1
percent at $2,770 and lead ended 0.5 percent lower at
 BASE METALS PRICES                  1610 GMT                   
 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                                           
 BASE METALS ARBITRAGE                                          
 LME/SHFE COPPER                  LMESHFCUc3              595.85
 LME/SHFE ALUMINIUM               LMESHFALc3            -1886.28
 LME/SHFE ZINC                    LMESHFZNc3              869.97
 LME/SHFE LEAD                    LMESHFPBc3            -1732.81
 LME/SHFE NICKEL                  LMESHFNIc3                2372
 (Additional reporting by Melanie Burton; editing by David Evans
and David Clarke)

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