September 25, 2017 / 6:40 AM / 25 days ago

METALS-Nickel, zinc rebound, China economy jitters cap gains

 (Adds comment, detail, updates prices)
    By Melanie Burton
    MELBOURNE, Sept 25 (Reuters) - London zinc and nickel rose
on Monday, rebounding from declines in the previous session, but
price gains were limited as investors remained cautious on the
outlook for the economy in China, the world's top metal
consumer, and for the U.S. dollar.  
    Investors had been encouraged to cash-in profits in a
recently rising metals market after China's economic growth
showed signs of slowing in August, said Dominic Schnider of UBS
Wealth Management in Hong Kong, suggesting any bounce may prove
short-lived.
    "I can't get excited (about metals) I'm sorry to say.
Chinese numbers have not really been hinting in the right
direction from a fixed-asset investment point of view. I also
think the market is underpricing the Fed, so the dollar has the
potential to gain some more." 
    A stronger dollar erodes the purchasing power for metals
buyers paying with other currencies. 
    
    FUNDAMENTALS
    * COPPER: London Metal Exchange copper rose 0.3
percent to $6,478.50 a tonne by 0554 GMT. On Friday, prices fell
to their lowest since Aug. 16 at $6,366. Shanghai Futures
Exchange copper rose 0.9 percent to 50,320
yuan($7,619).
    * NICKEL: LME nickel which dropped by more than 5
percent on Friday after the ShFE hiked trading fees, recovered
by 1.3 percent. ShFE nickel fell for a second day,
dropping 1.9 percent.
    * ZINC: LME zinc rose nearly 2 percent, regaining
its losses from Friday. 
    * INVESTORS: Hedge funds and money managers cut their
net-long position in COMEX copper in the latest week, U.S.
Commodity Futures Trading Commission data showed on Friday.

    * CHINA LENDING: China's latest push to revive its bloated
state-owned sector is set to pick up pace this year, with
bankers and investors expecting possible spin-offs and asset
sales to follow a key Communist Party Congress in October.

    * S. KOREA JITTERS: Some banks have begun to pare back
credit lines to smaller trading companies holding industrial
metals in South Korea amid escalating tensions over North
Korea's nuclear and missile program, two industry sources said
this week.
    * CHINA MINING: China's mining industry will shrink if the
government does not cut it some slack in return for compliance
with strict environmental policies, the head of one of the
country's largest gold miners said on Saturday.
    * ZINC M&A: Kazakhstan-focused copper miner Central Asia
Metals said it would buy Bermuda-based Lynx Resources
Ltd, a miner of lead and zinc, in a $402.5 million
reverse-takeover deal from its owners.
    * CHINA POLLUTION: Cities in China's eastern province of
Anhui are issuing plans to curb production in the steelmaking,
non-ferrous smelting, cement and coal-fired power sectors over
the coming winter in a drive to meet a politically crucial air
pollution target.     
    * COMING UP: Germany Ifo business climate Sep at 0800 GMT 
        PRICES    
 BASE METALS PRICES             0555 GMT           
 Three month LME copper                      6474.5
 Most active ShFE copper                      50300
 Three month LME aluminium                   2149.5
 Most active ShFE                             16475
 aluminium                                
 Three month LME zinc                        3084.5
 Most active ShFE zinc                        25175
 Three month LME lead                          2489
 Most active ShFE lead                        20725
 Three month LME nickel                       10540
 Most active ShFE nickel                      84030
 Three month LME tin                          20585
 Most active ShFE tin                        145370
                                                   
 BASE METALS ARBITRAGE                             
 LME/SHFE COPPER            LMESHFCUc3       338.63
 LME/SHFE ALUMINIUM         LMESHFALc3       -16.03
 LME/SHFE ZINC              LMESHFZNc3       820.14
 LME/SHFE LEAD              LMESHFPBc3       206.74
 LME/SHFE NICKEL            LMESHFNIc3      1796.37
 
($1 = 6.6042 Chinese yuan renminbi)

    
 (Reporting by Melanie Burton; Editing by Richard Pullin and
Christian Schmollinger)
  
 
 

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