October 21, 2019 / 5:09 AM / a month ago

METALS-Copper hits 1-month high as Chile unrest fans supply worries

(Adds chart, updates prices)

By Mai Nguyen

SINGAPORE, Oct 21 (Reuters) - London copper hit its highest in a month on Monday as concerns over supply mounted amid intensifying unrest in top producer Chile and as hopes grew of a U.S.-China trade deal.

“Copper prices managed to rebound as strike action in Chile continued,” ANZ said in a note, citing strikes at Antofagasta Minerals’ Antucoya copper mine, Teck Resources Ltd’s Carmen de Andacollo mine and wider riots in Santiago and other major cities.

Chile is “at war” and the government will extend a state of emergency to more cities, President Sebastian Pinera said, after at least seven people were killed amid violent clashes and arson attacks over the weekend.

Meanwhile, U.S. President Donald Trump said he thinks a U.S.-China trade deal will be signed by the time the Asia-Pacific Economic Cooperation meetings take place in Chile on Nov. 16-17, easing worries over trade frictions.

FUNDAMENTALS

* LME COPPER: Three-month copper on the London Metal Exchange (LME) rose as much as 0.5% to $5,837.50 a tonne, its highest since Sept. 20, before easing later in the session to rise 0.1% by 0717 GMT.

* SHFE COPPER: The most-traded copper contract on the Shanghai Futures Exchange (ShFE) closed up 0.7% to 47,020 yuan ($6,648.38) a tonne, a one-week high.

* NICKEL: LME nickel fell as much as 1.1% to $16,050 a tonne, its lowest since Aug. 29, while ShFE nickel dropped as low as 2.9% to 125,330 yuan a tonne, its weakest since Aug. 30.

* NICKEL SPREAD: The premium of LME nickel cash over the three-month contract MNI0-3 shrunk to $73 a tonne, its lowest since Sept. 13, indicating supply tightness has eased.

* NICKEL STOCKS: Nickel stocks in ShFE warehouses SNI-TOTAL-W rose to the highest since Aug. 30 at 23,993 tonnes as of Friday, but LME nickel inventories MNISTX-TOTAL were still hovering near their lowest since late 2011.

* LME NICKEL: One company is holding 30% to less than 40% of warrants <0#LME-WHL>, indicating a dominant position over LME nickel stocks has reduced. An entity had been holding 50% to less than 80% of warrants in previous weeks.

* “It’s a big question how much money they still have to keep buying nickel and what their banks think. Once nickel price drops too much, their banks are also in trouble,” said a nickel analyst, referring to the dominant nickel holder of LME stocks.

* PRICES: LME aluminium eased 0.3%, zinc rose 0.4%, lead was down 0.4% and tin dropped 1%. In Shanghai, aluminium fell 0.7%, zinc rose 0.6%, lead declined 1.1% and tin decreased 2%.

* LEAD: Unexpected shortages of lead due to supply disruptions have helped prices of the car battery metal to outperform other metals such as copper, aluminium and zinc, but looming surpluses mean this trend is unlikely to persist.

* CHINA SCRAP: China has issued a fifth batch of quotas for imports of recently restricted types of scrap metal, including another 57,365 tonnes of high-grade copper scrap, according to a notice from a unit of the environment ministry.

* CHINA OUTPUT: China’s September refined copper output rose by 11.6% year-on-year to 838,000 tonnes, the highest since December 2018, while September zinc output rose by 18.9% year-on-year to 548,000 tonnes, the highest since December 2017, official data showed.

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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 = 7.0724 Chinese yuan renminbi)

Reporting by Mai Nguyen; Editing by Rashmi Aich and Subhranshu Sahu

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