March 21, 2019 / 7:28 AM / a month ago

METALS-London copper hits 3-week high on dollar weakness, tight supply

(Updates prices, adds analyst quote)

By Melanie Burton and Mai Nguyen

MELBOURNE/SINGAPORE, March 21 (Reuters) - London copper and most other base metals rose on Thursday, backed by a softer dollar after the U.S. Federal Reserve abandoned plans for a further rate rise this year, and by a lack of near-term supply.

The dollar nursed losses in Asia after the Fed roiled markets by abandoning all plans to raise rates this year, a signal its three-year campaign to normalise policy might be at an end.

COPPER: London Metal Exchange copper rose 0.9 percent to $6,517 a tonne by 0706 GMT, having touched a near three-week high earlier in the session. On the Shanghai Futures Exchange, copper gained 0.3 percent to close at 49,420 yuan ($7,399.31) a tonne.

Zinc: Shanghai zinc finished up 0.7 percent at 21,895 yuan a tonne amid a lack of supply. Prices hit 22,170 yuan last week, their highest since last April.

FOMC: The Federal Open Market Committee has put the brakes on any potential rate hikes this year, leading to a slightly softer dollar and a rally in metals in thin-volume trade in Asia, wrote Malcolm Freeman, director of Kingdom Futures, in a note.

TRADE: U.S. President Donald Trump warned on Wednesday that the United States may leave tariffs on Chinese goods for a “substantial period” to ensure that Beijing complies with any trade agreement.

DEFICIT: The market was in a 387,000 tonne deficit in 2018 compared with a 265,000 tonne deficit the year before, the International Copper Study Group said.

SPREADS: Short-dated copper spreads have flared out over the past month, illustrating a lack of immediately available supply, even after 70,000 tonnes arrived in LME warehouses last week. CMCUT-0

LME: Data shows a dominant holder of copper warrants and nearby futures positions, suggesting lending guidance is in play. <0#LME-WHT> <0#LME-WHC>

PHILIPPINE NICKEL: Philippine nickel producer DMCI Mining Corp, a unit of conglomerate DMCI Holdings Inc, said it expected 2019 to be a tough year, with one of its two mines still suspended and its inventory almost depleted.

* ELECTRIC VEHICLES: Amnesty International attacked the electric vehicle (EV) industry on Thursday for selling itself as environmentally friendly while producing many of its batteries using polluting fossil fuels and unethically sourced minerals.

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 = 6.6790 Chinese yuan)

Reporting by Melanie Burton in Melbourne and Mai Nguyen in Singapore; Editing by Joseph Radford and Subhranshu Sahu

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