By Mai Nguyen
SINGAPORE, Oct 10 (Reuters) - Copper prices rose on Thursday following reports that the United States is weighing a currency pact with China and could suspend a tariff hike planned next week.
Traders and brokers said despite doubts about the outcome of U.S.-China trade talks set to begin on Thursday, the metals market was taking note of a Bloomberg report saying the White House plans to roll out a formerly agreed currency pact with China and to hold further talks.
Three-month copper on the London Metal Exchange (LME) rose as much as 1.1% to $5,749 a tonne, after falling 0.3% amid reports suggesting a less optimistic outcome from the trade talks.
Copper prices on the Shanghai Futures Exchange (ShFE) ended up 0.1% to 46,700 yuan ($6,566.46) a tonne after spending much of Asian trading in negative territory.
Reuters reported China had lowered expectations for this week’s trade talks after the United States blacklisted Chinese companies.
The South China Morning Post newspaper also reported that two sides had made no progress in deputy-level trade talks held on Monday and Tuesday.
“It’s quite messy as we see news from both sides. People may see the direction of currency a signal of potentially positive outcome, and copper, a key indicator for an optimistic macro, also gained some attention,” said a Singapore-based trader.
* LONDON PRICES: LME nickel rose 1.8% by 0714 GMT, zinc advanced 2.3%, lead increased 0.7%, tin edged up 0.1% and aluminium was up 0.2%.
* SHANGHAI PRICES: Shanghai aluminium declined 0.4% after touching a two-month low, lead fell 0.5%, zinc rose 0.9% and nickel was up 0.5%.
* “We see the yuan has strengthened. Strong yuan benefits imports, which means increasing inflows of cargoes ...(leading to) more domestic supply, so LME (prices) go up and ShFE (prices) go down,” said the trader.
* ALUMINIUM: Shanghai aluminium prices have been outperforming LME prices due to a shortage in China as domestic supplies fall, a divergence expected to dominate for some time.
* KCM SMELTER: Zambia’s Konkola Copper Mines (KCM) smelter on Wednesday was shut down for annual maintenance two days earlier than planned after a leak, its provisional liquidator Milingo Lungu said.
* CHINA: China’s cabinet announced steps on Tuesday to ease growing fiscal strains on local governments, amid a push to cut taxes to support the slowing economy.
* LAS BAMBAS: Operations at Las Bambas, one of Peru’s largest copper minefields, are being affected by blocked roads disrupting supplies since Sept. 22 amid anti-mining protests, Chinese miner MMG Ltd said.
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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
ARBS ($1 = 7.1119 Chinese yuan renminbi) (Reporting by Mai Nguyen; editing by Subhranshu Sahu and Jason Neely)