January 29, 2018 / 5:14 AM / 2 years ago

METALS-Zinc extends gains on tight market, weaker dollar

 (Adds Shanghai closing prices, updates London prices)
    MELBOURNE, Jan 29 (Reuters) - London zinc surged to its
highest in more than 10 years on Monday, with a weaker dollar
triggering buying amid bets that tightening global supply will
propel prices even higher.
   "The release of manufacturing data in China this week should
set the tone for commodity markets. Another strong PMI should
snuff out any concerns over weakening demand leading into the
Chinese New Year," ANZ said in a report.
    
    FUNDAMENTALS
    * London Metal Exchange zinc was up 2 percent at
$3,548.50 a tonne, as of 0717 GMT, having earlier topped at
$3,584, the highest since mid-2007. 
    Shanghai Futures Exchange (ShFE) zinc ended 3.3
percent higher at 27,055 yuan ($4,278.49) a tonne for its
highest close since March 2008.  
    * Under-investment in zinc mines during the economic
downturn over the last 10 years has led to shortfall of the
metal: LME zinc inventories have slumped below 180,000 tonnes,
of which less than 100,000 tonnes is available to market - the
least since 2008. In China, exchange stockpiles ticked higher
last week but also remain close to 10-year lows. ZN-STX-SGH
MZNSTX-TOTAL
    * LEAD, NICKEL: Lead and steel-linked material
nickel were in line with zinc's gains, rising by 1.6 and
2 percent, respectively.
    * LME copper climbed 0.8 percent to $7,144 a tonne,
erasing losses from the previous session. ShFE copper
finished up 0.1 percent at 53,600 yuan  a tonne.
    * USD: The dollar crawled up from lows on Monday but
struggled to pull ahead from six straight weeks of losses on its
evaporating yield advantage and doubts about Washington's
commitment to a strong currency.
    * CHINA ECONOMY: China's economic growth will likely slow to
6.5-6.8 percent this year, a senior official at the country's
top economic planner wrote in the Beijing Daily on Monday, while
warning about the risks of "Black Swan" and "Gray Rhino" events.

   * INVESTORS: Hedge funds and money managers cut their net
long position in COMEX copper contracts in the week to Jan. 23,
U.S. Commodity Futures Trading Commission data showed on Friday.

    * COPPER STRIKE: Chile's Codelco has struck a contract deal
with workers at its Andina copper mine, it said on Saturday, as
the state-owned company tries to reach advance agreements with
some unions in a year expected to be rife with labour
negotiations.
    * For the top stories in metals and other news, click       
 or     
        
    MARKETS NEWS    
    * Asian shares extended their bull run on Monday amid upbeat
corporate earnings and strong global economic growth, while the
dollar tried to bounce even as the White House continued to
complain of "unfair" trade practices by competitors.
    PRICES    
   
 BASE METALS PRICES                        0721 GMT
 Three month LME copper                        7144
 Most active ShFE copper                      53590
 Three month LME aluminium                     2261
 Most active ShFE aluminium                   14665
 Three month LME zinc                          3546
 Most active ShFE zinc                        27050
 Three month LME lead                        2632.5
 Most active ShFE lead                        19795
 Three month LME nickel                       13910
 Most active ShFE nickel                     105910
 Three month LME tin                          21660
 Most active ShFE tin                        150930
                                                   
 BASE METALS ARBITRAGE                             
 LME/SHFE COPPER              LMESHFCUc3     913.04
 LME/SHFE ALUMINIUM           LMESHFALc3   -1928.74
                                          
 LME/SHFE ZINC                LMESHFZNc3     465.71
 LME/SHFE LEAD                LMESHFPBc3    -328.17
 LME/SHFE NICKEL              LMESHFNIc3    2070.79
                                          
 
($1 = 6.3235 Chinese yuan)

    
 (Reporting by Melanie Burton, additional reporting by Tom Daly
in BEIJING, Editing by Richard Pullin and Sherry Jacob-Phillips)
  
 
 
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