January 22, 2018 / 10:49 AM / in 2 years

METALS-Copper higher on optimism over demand, supply concerns

* GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

* LME/ShFE arb: bit.ly/2wZSAEz (Updates with closing prices)

By Jan Harvey

LONDON, Jan 22 (Reuters) - Copper rose on Monday, leading broad gains across base metals as optimism over the outlook for global growth and supply concerns helped prices recover some of the previous session’s losses.

After a half-percent drop on Friday, copper prices bounced back nearly 1 percent, while tin climbed to another three-month high at $20,800 a tonne.

“There is general macro optimism, with some good data suggesting that global growth remains on track,” Societe Generale analyst Robin Bhar said. “We have China data showing stability, U.S. data has been encouraging, so has Europe.”

“Copper and zinc, the two most supply-constrained metals, are still being underpinned by supply fears.”

Barclays said in a note the recent copper price rally was a response to the distribution of global inventories, with tightness seen in key markets.

It has raised its 2018 forecast for the LME average cash price of copper to $6,619 a tonne, and said rallies to as high as $7,700 a tonne are “both possible and likely” if certain conditions are met.

* COPPER: London Metal Exchange copper closed up 0.4 percent at $7,068 a tonne, reversing losses from the previous session. Prices last week edged down to $7,027, with the $7,000 level as yet unbroken this year.

* GLOBAL ECONOMY: The International Monetary Fund on Monday revised up its forecast for world economic growth in 2018 and 2019 saying that sweeping U.S. tax cuts were expected to boost investment in the world’s largest economy and help its main trading partners.

* COPPER TECHNICALS: LME copper may break support at $7,036 per tonne and fall more to the next support at $7,005, Reuters technical analyst Wang Tao said, citing its wave pattern and a Fibonacci ratio analysis.

* TIN PRICES: LME tin ended the day 0.7 percent higher at $20,750 a tonne.

* TIN POSITIONING: One entity holds more than 90 percent of tin cash contracts and warrants on the LME system <0#LME-WHC>. The premium of cash tin over the three-month contract MSN0-3 jumped to $105 a tonne on Monday, a two-month high, indicating concerns over market tightness.

* ZINC, LEAD: LME zinc finished at $3,414 a tonne, 0.1 percent lower and edging further from the 10-year peak of $3,444 seen on Friday. Lead, which hit a seven-year high at $2,630.50 a tonne last week, closed up 1.5 percent at $2,620.

* ZINC STOCKS: Stocks of zinc held in LME-registered warehouses MZNSTX-TOTAL declined another 25 tonnes to 179,950 tonnes, their lowest in nearly a decade. On-warrant stocks available to the market slipped to their lowest in six months.

* OTHER METALS: LME aluminium finished the day up 1.4 percent at $2,249 a tonne, while nickel ended 0.3 percent higher at $12,760.

Additional reporting by Melanie Burton in MELBOURNE and Tom Daly in BEIJING; Editing by Jason Neely/Mark Potter/Alexander Smith

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