November 22, 2019 / 8:08 AM / 15 days ago

METALS-Copper drops on U.S.-China trade deal doubts

(Updates prices, adds Chinese leader’s remarks in paragraph 3)

MANILA, Nov 22 (Reuters) - Copper slipped on Friday, with the benchmark London prices set for a second straight weekly decline, on conflicting signals over an interim trade deal between the world’s two biggest economies.

Three-month copper on the London Metal Exchange was down 0.2% at $5,820.50 a tonne, by 0736 GMT, while the most-traded copper contract on the Shanghai Futures Exchange ended 0.5% lower at 46,870 yuan ($6,662.88) a tonne.

Chinese President Xi Jinping, speaking at an international forum in Beijing, said China wants to work out an initial deal with the United States and has been trying to avoid a trade war, but is not afraid to retaliate when necessary.

Market sentiment soured this week on fears of further delay in the signing of a “phase one” deal, with two U.S. legislations backing protesters in the Chinese-ruled city of Hong Kong adding to concerns that talks could flounder.

While supply issues supported prices as the copper market is in deficit this year and probably also in 2020, demand prospects remained clouded amid global economic slowdown.

Data on October industrial profits in top copper consumer China, to be released next week, will likely show an economy still reeling under the trade spat, said ING economist Prakash Sakpal.

“The latest news hasn’t been very good. First, the postponement of the deal signing to December, and now probably to 2020,” Sakpal said.

FUNDAMENTALS: The global world refined copper market was in a 330,000 tonnes deficit for the first eight months of the year, compared with a 268,000 tonnes deficit in the same period a year earlier, according to the International Copper Study Group.

TREATMENT CHARGES: Miner Freeport-McMoRan Inc and three Chinese copper smelters agreed a 23% cut in annual treatment and refining charges for 2020, pushing the industry benchmark to a nine-year low.

GLOBAL GROWTH: The global economy is growing at the slowest pace since the financial crisis as governments leave it to central banks to revive investment, the OECD said in an update of its forecasts.

RARE EARTHS: China will accelerate the launch of futures contracts for rare earths, used in devices such as mobile telephones and batteries, a Shanghai Futures Exchange official said.

COPPER: Rio Tinto faces renegotiating the terms of an agreement underpinning its Mongolian copper mine project, after lawmakers on Thursday approved plans to revise the deal to make it more beneficial for Mongolia.

NICKEL: The global nickel market deficit widened to 3,200 tonnes in September from a revised shortfall of 300 tonnes the previous month, the International Nickel Study Group said.

OTHER PRICES: Base metals traded mixed, with LME nickel slipping 0.7% and ShFE nickel down 0.4%, while LME tin gained 0.3% and ShFE tin rallied 1.8%.

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

ARBS

($1 = 7.0345 yuan)

Reporting by Enrico dela Cruz; Editing by Subhranshu Sahu, Sherry Jacob-Phillips and Shailesh Kuber

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