July 26, 2017 / 7:47 AM / 2 years ago

METALS-London copper hits 2-year high on outlook that China may ban scrap imports

 (Updates prices)
    By Melanie Burton
    MELBOURNE, July 26 (Reuters) - London copper climbed to its
highest in more than two years on Wednesday, buoyed by a weaker
dollar and talk that China's appetite for refined metal could
grow if it curbs scrap imports.
    China may ban imports of some scrap metal, including copper,
from the end of 2018, according to an industry association
notice, which may lead to higher refined copper imports into the
world's largest consumer of the metal.
    The recycling branch of the China NonFerrous Metals Industry
Association said on Tuesday that it had received a notice that
at the end of 2018 imports of scrap metal including wire, motors
and bulk scrap metal will be prohibited, according to a copy of
an informal Association message sent to members of its WeChat
group reviewed by Reuters.
    "If true, it could make a reasonable impact short-term,"
said analyst Dan Morgan of UBS in Sydney. "These moves would
make sense in the context of reforms going on in China, with
moves to reduce pollution."      
    
    
    FUNDAMENTALS
    * LME COPPER: London Metal Exchange copper had
climbed 1.2 percent to $6,297 a tonne as of 0719 GMT, extending
Monday's 3.3 percent gains. Earlier in the session, prices hit
their highest since May 2015 at $6,400 a tonne.
    * TECHNICAL ANALYSIS: Traders said technical momentum was
stoked when copper broke long-standing resistance through
$6,000-$6,050 and as copper prices adjust to a weaker dollar and
fuelled as shorts were forced to cover.
    "Fundamentals are fine, but not so vigorous as to fuel such
a rally," said a source at a Chinese smelter. 
    * SHFE COPPER: Shanghai Futures Exchange copper
rallied to its highest in over five months at 50,730 yuan 
($7,507) a tonne. 
    * Indonesia has reached an agreement with U.S. miner
Freeport McMoRan Inc that any new operating permit for
its Grasberg copper mine will only be valid until 2021, an
energy and mining ministry official said on Wednesday.

    * U.S. ECONOMY: The Federal Reserve is expected to hold
interest rates unchanged on Wednesday and possibly hint that it
will start winding down its massive holdings of bonds as soon as
September in what would be a vote of confidence in the U.S.
economy.
    * GLOBAL INFRASTRUCTURE: Nearly a fifth of the $94 trillion
in global infrastructure investment needed by 2040 risks being
unfunded if current spending trends continue, the G20-backed
Global Infrastructure Hub said on Tuesday.
    * ZAMBIA COPPER MINE: Zambia's Konkola Copper Mines (KCM)
said on Tuesday it was halting operations indefinitely at its
Nchanga underground mine (NUG) in Chingola state due to theft of
high voltage cables.
    * For the top stories in metals and other news, click       
 or     
        
    MARKETS NEWS    
    * Asian stocks steadied on Wednesday and the dollar held
firm as investors awaited the Federal Reserve's policy decision
later in the day for more clues on its tightening plans.
    
        
    * COMING UP: U.S. FOMC statement at 1800 GMT 
 
     PRICES    
    
 BASE METALS PRICES                0719 GMT          
 Three month LME copper                          6302
 Most active ShFE copper                        50040
 Three month LME aluminium                     1945.5
 Most active ShFE aluminium                     14510
 Three month LME zinc                          2823.5
 Most active ShFE zinc                          23260
 Three month LME lead                            2317
 Most active ShFE lead                          17935
 Three month LME nickel                          9925
 Most active ShFE nickel                        80910
 Three month LME tin                            20275
 Most active ShFE tin                          146830
                                                     
 BASE METALS ARBITRAGE                               
 LME/SHFE COPPER             LMESHFCUc3        417.16
 LME/SHFE ALUMINIUM          LMESHFALc3       -744.24
 LME/SHFE ZINC               LMESHFZNc3         546.6
 LME/SHFE LEAD               LMESHFPBc3       -960.66
 LME/SHFE NICKEL             LMESHFNIc3       2195.41
 
($1 = 6.7581 Chinese yuan renminbi)

    
 (Reporting by Melanie Burton; Editing by Joseph Radford and
Christian Schmollinger)
  
 
 
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