October 11, 2017 / 10:26 AM / 3 years ago

METALS-Copper rises to one-month high ahead of China party congress

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

By Peter Hobson

LONDON, Oct 11 (Reuters) - Copper rose on Wednesday to a one-month high, helped by a weaker dollar ahead of the release of the minutes of a U.S. Federal Reserve meeting, with investors looking to a party congress in top metals consumer China due to begin next week.

Prices were likely to consolidate around current levels due to anticipated deficits in the supply of copper and most other industrial metals through the fourth quarter and into next year, said ING analyst Warren Patterson.

“We have to continue to espouse buying the dips,” brokers Marex Spectron said in a note.

COPPER: Benchmark copper on the London Metal Exchange closed up 0.6 percent at $6,801 a tonne after touching $6,817.50, the highest since Sept. 8.

CHINA: Copper and other metals have been driven higher by expectations of solid demand and a crackdown on polluting mines and smelters in China, the world’s biggest consumer.

CHINA CONGRESS: Investors were looking for signals of China’s economic and environmental policy direction during a five-yearly party congress starting on Oct. 18.

SPECULATORS: Investors increased bets that metals prices will rise, with the net long position in LME copper seeing the first weekly rise since August in the week to Oct. 6 LME-CA-MNET. Net longs in zinc, nickel, aluminium and tin also rose.

GLOBAL GROWTH: A broad-based global economic upswing will likely be sustained this year and next, the International Monetary Fund said on Tuesday.

JAPAN FACTORIES: Japan’s core machinery orders rose for a second straight month in August, beating market expectations.

FED/DOLLAR: The U.S. Federal Reserve will publish minutes from its September meeting later on Wednesday. A hawkish tone on interest rate rises could boost the dollar, making metals more expensive for holders of other currencies.

ALUMINIUM PREMIUMS: Japanese aluminium buyers will pay up to 21 percent less in import premiums in the October-December quarter to reflect a slide in spot premiums.

ZINC STOCKS: On-warrant stocks of zinc available to the market in LME-registered warehouses rose by 7,025 tonnes to 132,500, taking the increase this month to 17 percent. MZNSTX-TOTAL

SPREAD: But the premium of cash zinc over the three-month contract reached a new 10-year high of $80 a tonne, indicating shortages in immediately available supply. MZN0-3

ZINC/LEAD SUPPLY: The global zinc market deficit widened to 39,600 tonnes and the global deficit in lead narrowed to 4,600 tonnes in August.

PRICES: Zinc closed down 1.8 percent at $3,219 a tonne, aluminium fell 1.5 percent to $2,130, nickel ended 0.7 percent higher at $11,135, lead finished up 0.3 percent at $2,565 and tin closed 0.7 percent higher at $20,870.

Additional reporting by Melanie Burton; Editing by Mark Heinrich and Elaine Hardcastle

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