October 16, 2017 / 5:32 AM / 3 years ago

METALS-London copper hits 3-year high, breaking $7,000/T, on rosier China economy

 (Adds comment, detail, updates prices)
    By Melanie Burton
    MELBOURNE, Oct 16 (Reuters) - London copper prices charged
through the $7,000 mark for the first time in three years on
Monday, underpinned by improving manufacturing profits in China
that pointed to robust growth in the world's top user of metals.
    China's producer price inflation unexpectedly accelerated to
a six-month high in September as a construction boom showed no
signs of abating and as a government crackdown on air pollution
triggered fears of winter shortages.
    The inflation reading followed data showing China's copper
imports surged in September, fuelling optimism about demand,
said analyst Helen Lau of broker Argonaut Securities in Hong
Kong. 
   "Based on these quite solid fundamentals, people will react
very positively to any newsflow on copper," she said. 
    
    FUNDAMENTALS
    * LME COPPER: London Metal Exchange copper struck
$7,111.50 a tonne, the highest since August 2014, and traded at
$7,058 by 0722 GMT, up 2.6 percent. Prices have climbed nearly 9
percent so far this month and are up 27 percent year to date,
the biggest annual gain since 2010.
    * SHANGHAI COPPER: Shanghai Futures Exchange copper
rallied 3.1 pct to 55,090 yuan ($8,364) a tonne, the highest
since February 2013. 
    * CHINA COPPER: China's unwrought copper imports surged by
26.5 percent in September from a year ago, customs data showed
on Friday, but remained on course for an annual drop in 2017.

    * CHINA ECONOMY: China's economy is expected to grow 7
percent in the second half of this year, the country's central
bank governor said, defying economists' expectations for a
slowdown.
    * Copper is testing resistance around $7,100 to $7,200 per
tonne, which should hold because participation in the current
rally appears to be weaker than last December, said Gianclaudio
Torlizzi, managing director of consultancy T-Commodities. "I am
looking to short," he said.
    * OIL: Oil markets jumped on Monday on concerns over
potential renewed U.S. sanctions against Iran as well as
conflict in Iraq.
    * COPPER, ALUMINIUM: In a potential boost to U.S. copper and
aluminium demand, the Trump administration is requiring the use
of North American-made steel, aluminium, copper and plastic
resins in cars and trucks sold under North American Free Trade
Agreement rules.
    * COPPER INVESTORS: Hedge funds and money managers raised
their net long positions in copper futures and options for the
first time in five weeks, in the week to Oct. 10, U.S. Commodity
Futures Trading Commission data showed on Friday.
    * COMING UP: China is in the midst of publishing September
data, culminating in its third-quarter gross domestic product
number on Thursday. The twice-in-a-decade Communist Party
congress will begin on Wednesday where President Xi Jinping is
expected to strengthen his grip on power in a major party
leadership reshuffle.
    PRICES    
    
 BASE METALS PRICES                   0717 GMT         
 Three month LME copper                            7065
 Most active ShFE copper                          55090
 Three month LME aluminium                       2153.5
 Most active ShFE aluminium                       16465
 Three month LME zinc                            3279.5
 Most active ShFE zinc                            26260
 Three month LME lead                            2573.5
 Most active ShFE lead                            20575
 Three month LME nickel                           11735
 Most active ShFE nickel                          93410
 Three month LME tin                              20770
 Most active ShFE tin                            147700
                                                       
 BASE METALS ARBITRAGE                                 
 LME/SHFE COPPER                   LMESHFCUc3     819.8
 LME/SHFE ALUMINIUM                LMESHFALc3     -32.3
 LME/SHFE ZINC                     LMESHFZNc3    534.69
 LME/SHFE LEAD                     LMESHFPBc3    -203.2
 LME/SHFE NICKEL                   LMESHFNIc3    2188.5
 
    ($1 = 6.5755 Chinese yuan)

    
 (Reporting by Melanie Burton; Editing by Tom Hogue and Sonali
Paul)
  
 
 
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