May 6, 2020 / 10:41 AM / 21 days ago

METALS-Copper gains for third day on easing virus lockdowns, yuan move

    * LME copper spread eases on healthy supplies
    * Copper hits highest since April 30

 (Updates with official prices)
    By Eric Onstad
    LONDON, May 6 (Reuters) - Copper prices clawed higher for a
third day on Wednesday to the highest in nearly a week as
investors welcomed more easing of pandemic lockdowns and a pause
in China-U.S. tensions.
    Most industrial metals joined other risky assets such as
stocks and oil in ticking higher on brighter sentiment as
countries this week started phased reopening of economies.
    Also supporting commodities was the central bank in China,
the world's top metals consumer, setting the yuan        at a
broadly neutral midpoint, a move regarded by analysts as Beijing
offering a olive branch to Washington amid renewed trade
    "Some of the worries related to the flare-up in China/U.S
tension caused a spike in the offshore renminbi over the
weekend, so that's brought some calm to the market," said Ole
Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
    Benchmark three-month copper on the London Metal Exchange
(LME)         rose 1.4% to $5,228 a tonne in official trading,
its highest since April 30.
    Copper, used as a gauge of global economic health, has
gained 19% on the LME since March 19, when the contract hit a
45-month low.    
    Hansen cautioned, however, that copper would struggle at
last week's high just under $5,300.
    "Commodities are supply and demand driven so with these
headwinds the upside remains limited. As we're facing global
recession and billions of unemployed, economic activity is just
not going to be strong enough to support a substantial recovery
from these levels."
    The most-traded June copper contract on the Shanghai Futures
Exchange (ShFE)          closed down 0.3% at 42,720 yuan
($6,027.00) a tonne on its first trading day following a break 
for Labour Day holidays between May 1-5.
    * COPPER SPREAD: The discount of LME cash copper to the
three month contract CMCU0-3 rose to $30.50 a tonne by
Tuesday's close, the biggest since Jan. 23 and compared to a
discount of $3 in late March, indicating healthy supply of metal
in LME warehouses. It was last quoted at $28.15 on Wednesday.  
    * FREEPORT: Freeport-McMoRan Inc         is planning to
reassess operations at a New Mexico copper mine that has been
temporarily shuttered due to the COVID-19, a spokeswoman said.
    * PRICES: Aluminium         slipped 0.2% to $1,481 a tonne
in official activity while nickel         advanced 2.3% to
$12,273, zinc         climbed 1.6% to $1,949.50, lead added 0.4%
to $1,638 and tin         shed 1.1% to $15,036.
    * For the top stories in metals and other news, click       
$1 = 7.0881 yuan)

 (Additional reporting by Mai Nguyen in Singapore, editing by
Louise Heavens)
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