March 8, 2017 / 3:05 AM / 3 years ago

METALS-London copper rises on China trade despite drop in refined metal imports

    * LME copper stocks rise by one-third in March
    * Nickel prices to ease in 2017 as Indonesia resumes
    * Nickel weakened on concerns of Philippine mining ban
    * Coming Up: China trade data at 0200 GMT

 (Adds comment, detail, updates prices)
    By Melanie Burton
    MELBOURNE, March 8 (Reuters) - London copper climbed on
Wednesday as traders took profit on short positions and after
upbeat Chinese trade data eclipsed an overall drop in the
country's imports of refined metal.    
    China unexpectedly posted a rare trade deficit in February
as imports surged far more than expected to feed a months-long
construction boom, driven by commodities from iron ore and
copper to crude oil and coal. 
    That copper demand, however, was mainly in the form of ore
imports for use in domestic smelters rather than an intake of
refined metal.             
    "Copper was the only major commodity to show some weakness,
with imports of refined copper and products falling 19 percent..
This was partly mitigated by strong copper concentrate imports
and subsequent surge in domestic copper production," said ANZ in
a report. 
   Three-month copper on the London Metal Exchange         was
up 0.2 percent at $5,786 a tonne by 0725 GMT, paring a 1.5
percent loss during the previous session. Prices on Tuesday fell
to $5,759 a tonne, the weakest since Feb. 3.
    Shanghai Futures Exchange (ShFE) copper          fell 1.1
percent to 47,140 yuan ($6,831) a tonne. Earlier in the session,
prices hit their lowest in a month at 46,910 yuan. 
    Copper prices have been dragged down by a surge in exchange
inventories that has fanned concern about demand strength in
Asia. LME copper stocks have jumped by one-third in the past
week to the highest since late January at about 262,000 tonnes.
    However, mine disruptions in Chile, Peru and Indonesia are
still supporting prices, with the prospect of labour unrest
expected to carve deeper into supply deficits forecast for this
    "We think price consolidation in the metals space is short
term as metals, especially copper and nickel, continue to face
supply uncertainties while demand across the globe is getting
more visible led by China and U.S.," Argonaut Securities said.
    In other metals, LME nickel edged down by 0.3 percent to
$10,615 a tonne, extending the 4 percent drop during Tuesday's
session when prices hit a two-week low on expectations the
Philippines may soften mine closure plans. ShFE nickel         
ended Wednesday's session down 3.3 percent.
    BMI Research expects refined nickel prices to ease over a
three-to-nine month horizon, as Indonesia resumes exports and as
major nickel mines in the Philippines, the world's top exporter,
manage to maintain production. 
    "Although environmental policies in the Philippines have
threatened the closure of up to 20 nickel mines, we remain
confident that there will not be any significant output declines
in the Philippines in 2017 compared to 2016 as most major miners
will avoid the regulatory crackdown."
    Philippine President Rodrigo Duterte said on Tuesday he
hopes there will be a "happy compromise" between the mining
industry and protecting the environment.             
    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 = 6.9025 Chinese yuan)

($1 = 6.9008 Chinese yuan renminbi)

 (Reporting by Melanie Burton; Editing by Sherry Jacob-Phillips)
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