November 23, 2015 / 4:54 AM / 5 years ago

METALS-Metals sag to multi-year lows on China demand woes, stronger dollar

* Nickel careens 6 pct down on grim China steel outlook
    * LME launches aluminium premiums, steel contracts
    * China refined copper imports climb 12 pct in October
    * Coming Up: Euro zone Markit Mnfg PMI flash Nov at  0900

 (Adds detail; updates prices)
    By Melanie Burton
    MELBOURNE, Nov 23 (Reuters) - London copper crashed to a new
six-and-a-half-year low on Monday, with other metals near their
own multi-year troughs, as China's slowing factory demand pushes
more supply onto global markets and the dollar strengthens
against a slew of other currencies. 
    Base metals have been punished on one hand by slowing
economic growth in top user China, and on the other by a strong
dollar that has cut the buying power of other currencies ahead
of an expected U.S. interest rate hike in December.     
    Metals tied to China's huge steel sector were especially
hard hit on Monday, with London zinc and London nickel plunging
nearly 3 percent and as much as 5 percent, respectively.
    Demand was unlikely to pick up ahead of year-end, as
producers and manufacturers conserve cash flow, rather than
restocking ahead of the Christmas and New Year period, said
analyst Helen Lau of Argonaut Securities.     
    "Further price weakness ahead seems likely," she said,
noting that funds were selling copper because of signs of poor
demand, such as sluggish sales of air conditioners and property.
    In signs of the weakening buying power in major consumer
markets, the euro extended its losses and hit a seven-month low
against the dollar, while China's onshore yuan opened at its
weakest since August following a lower official mid-point fix.
    Three-month copper on the London Metal Exchange (LME)
 slid 2.3 percent to $4,474.50 a tonne by 0728 GMT,
having earlier struck its weakest since May 2009 at $4,444.
    Shanghai Futures Exchange copper slid 3.6 percent
to 33,510 yuan ($5,246) a tonne, having also hit a six-year low.
    Some brighter news came with China's refined copper imports
rising 12 percent in October to 343,473 tonnes. Copper
concentrate imports also climbed, by 10 percent. 
    Shanghai nickel crashed limit down of 6 percent on
concerns that China's steel glut would hit other steel-making
materials. Shanghai zinc had a volatile session, before
closing up 1.4 percent, supported by last week's news about
planned huge supply cuts in China. 
    Investors are turning increasingly bearish on metals. In
copper, hedge funds and money managers increased their net short
positions by 8,430 lots to 27,827 lots, the biggest such gain
since mid-August, Commodity Futures Trading Commission (CFTC)
data showed.     
    In a sign of a possible boost in future demand, China is
offering $10 billion in infrastructure loans to Southeast Asian
countries, a senior Chinese foreign ministry official said on
    New steel and aluminium contracts being launched by the LME
on Monday are expected to attract initial interest from
customers, but building up strong liquidity in the current bear
market may be challenging.        
    Three month LME copper          
    Most active ShFE copper         
    Three month LME aluminium       
    Most active ShFE aluminium      
    Three month LME zinc            
    Most active ShFE zinc           
    Three month LME lead            
    Most active ShFE lead           
    Three month LME nickel          
    Most active ShFE nickel          
    Three month LME tin             
    Most active ShFE tin                    
($1 = 6.3880 Chinese yuan)

 (Editing by Tom Hogue and Subhranshu Sahu)
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