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METALS-Shanghai metals skid on North Korea tensions, China credit jitters
September 22, 2017 / 2:16 AM / in a month

METALS-Shanghai metals skid on North Korea tensions, China credit jitters

MELBOURNE, Sept 22 (Reuters) - Metals soured in Shanghai and London on Friday as investors slashed risk given escalating tensions on the Korean peninsula and ongoing jitters about China debt.

FUNDAMENTALS

* SHFE: In Shanghai, metals fell between 1 percent and 4.5 percent, with the steepest tumble in volatile nickel, which will also face higher trading fees on the Shanghai Futures Exchange from Friday.

* LME: In London, frothy lead suffered the worst selling, down nearly 4 percent, while copper fell 1.2 percent to its weakest since mid-August. Investors have surged into metals on prospects of resilient China demand and environmental curbs that cut supply in the world’s biggest producer of metals. Those with highest speculative froth are landing the most heavily.

* LME COPPER: LME copper tumbled to its weakest since Aug. 16, touching $6,400, down 1.2 percent.

* SHFE COPPER: Shfe copper slid 1.5 percent to 49,640 yuan ($7,543) a tonne.

* CONFUSION: “Not sure why so aggressive a move, guess the U.S. sanctions, delayed reaction in metals to FOMC,” said one trader in Hong Kong. “Confused markets I have to say, and on top of that trying to get out of risk when its all one way, only exacerbates the move and creates deeper moves in ever decreasing liquidity.”

* N. KOREA: North Korean leader Kim Jong Un blasted U.S. President Donald Trump as “mentally deranged” on Friday and vowed to make him pay dearly for threatening to destroy his country, hours after Trump ordered fresh sanctions over Pyongyang’s weapons programmes.

* CHINA CREDIT: S&P Global Ratings downgraded China’s long-term sovereign credit rating on Thursday, less than a month ahead of one of the country’s most sensitive political gatherings, citing increasing risks from its rapid build-up of debt.

* CHINA FACTORIES: Thousands of small factories in China, making everything from steel to chemicals, are scrambling for access to the country’s clogged rail network as Beijing curbs the use of diesel trucks in an effort to tackle air pollution.

* MACQUARIE: Australia’s Macquarie Group Ltd has overtaken Goldman Sachs to break into the top three banks for commodities business, having significantly expanded its U.S. energy operations in recent years while rivals cut back.

* Asian stocks slipped on Friday but showed signs of steadying as the dust began to settle after the Federal Reserve’s hawkish policy statement, while investors looked to see how Chinese financial markets would react to a downgrade on the nation’s credit rating.

DATA AHEAD (GMT)

0645 France GDP final Q2

0700 France Markit manufacturing PMI flash Sep

0730 Germany Markit manufacturing PMI flash Sep

0800 Euro zone Markit manufacturing PMI flash Sep

1345 U.S. Markit manufacturing PMI flash Sep

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 = 6.5804 Chinese yuan renminbi)

Reporting by Melanie Burton; Editing by Richard Pullin

Our Standards:The Thomson Reuters Trust Principles.
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