March 19, 2018 / 10:56 AM / 2 years ago

METALS-Copper slips as pre-Fed caution hurts metals

* Aluminium hits lowest since mid December at $2,069/T

* LME/ShFE arb:

* GRAPHIC-2018 asset returns: (Updates with closing prices)

By Jan Harvey

LONDON, March 19 (Reuters) - Copper eased and aluminium briefly touched its lowest since mid-December on Monday as cyclical assets broadly weakened ahead of an expected rise in U.S. interest rates and as finance ministers met for a G20 summit.

Along with concerns that higher interest rates could dampen growth, U.S. President Trump’s announcement of import tariffs on steel and aluminium has sparked fears of a global trade war that could weigh on demand for raw materials.

“Anything that undermines global growth will undermine metals consumption,” said Societe Generale analyst Robin Bhar.

Aluminium, which has registered sharp increases in stockpiles in recent weeks as cuts to Chinese smelting capacity came to an end, slipped to its lowest since mid-December before paring losses as the dollar retreated.

“We’ve seen some big stock builds on the London Metal Exchange and, more importantly, the Shanghai Futures Exchange, and that’s the root of the problem,” Bhar said.

“It must be that the winter cuts were not as deep as the market had been expecting, plus demand must be weaker than originally thought.”

* COPPER: London Metal Exchange copper closed 0.5 percent down at $6,854 a tonne, having slid earlier to its lowest since March 9 at $6,785.

* GLOBAL MARKETS: Shares were stuck on their worst run since November as caution gripped traders in a week in which the Federal Reserve is widely expected to raise U.S. interest rates.

* G20: Worries about a possible U.S.-China trade war and frustration over Trump’s steel and aluminium tariffs threatened to dominate this week’s G20 gathering of finance leaders.

* CHINA DEMAND: Growth in prices of new homes in China slowed in February from the previous month as government curbs aimed at tempering speculative demand softened prices in the biggest cities.

* ALUMINIUM PRICES: LME three-month aluminium fell to its lowest since Dec. 19 at $2,069 a tonne. It later recovered to end the day at $2,088, up 0.1 percent.

* ALUMINIUM STOCKS: Shanghai aluminium stocks surged by 87,303 tonnes to a record 934,216 tonnes, data showed on Friday. AL-STX-SGH Stocks of the metal in LME warehouses MALSTX-TOTAL fell by 12,250 tonnes, according to data released on Monday, but are still up 22 percent from February lows.

* INVESTORS: Hedge funds and money managers trimmed their net long positions in COMEX copper contracts in the week to March 13, regulatory data showed on Friday.

OTHER METALS: LME zinc finished little changed at $3,261 a tonne, while lead closed 0.7 percent down at $2,367. Tin lost 1 percent to $20,780 and nickel ended down 1.1 percent at $13,480.

Additional reporting by Melanie Burton in Melbourne Editing by Edmund Blair and David Goodman

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