February 12, 2018 / 8:36 AM / 8 months ago

METALS--London copper rises from two-month low, eyes Lunar New Year

 (Adds trader comment; updates prices)
    By Melanie Burton
    MELBOURNE, Feb 12 (Reuters) - London copper rose from its
lowest in nearly two months on Monday as the dollar dropped,
although traders remained cautious about demand after the Lunar
New Year holiday that starts this week. 
    Chinese demand for metals and supply constraints should be
supportive in 2018, while recent price strength looks to be a
function of global growth and demand, said Citi in a report. 
    "(However) while we expect housing-related metals demand to
stay fairly robust, potential slowdown of power infrastructure
and machinery spending appears worrisome," it said.
    
    FUNDAMENTALS
    * LME COPPER: London Metal Exchange copper rose 1.6
percent to $6,863 a tonne by 0730 GMT, recouping losses from the
previous session when it fell 1.3 percent to $6,733 a tonne, the
lowest since Dec. 14. Prices also crashed through the 100-day
moving average, worsening copper's chart picture. 
    * SHFE COPPER: Shanghai Futures Exchange copper
closed down 0.2 percent at 51,710 yuan ($8,202.47) a tonne,
having hit its weakest since late September amid a decline in
China's metals markets ahead of the Lunar New Year. Open
interest is at the highest in nearly two years. 
    * HOLIDAYS: The Shanghai Futures Exchange will close from
the evening of Feb. 14. "The physical market is pretty quiet now
leading up to (Lunar New Year). Premiums, onshore and offshore,
aren't high by any means," one Shanghai-based copper trader
said, expecting more positive sentiment after the holidays due
to perceived tightness later in the year. 
    * DEMAND: U.S. President Donald Trump will roll out an
infrastructure plan on Monday that already faces significant
hurdles in Congress because it does not offer as much new
federal funding as Democrats want or directly address how to pay
for the effort.
    * U.S. ECONOMY: A surprise surge in U.S. wage growth has
rocked global stock and bond markets in the past week, and
inflation figures from three of the world's biggest economies
could dictate whether investors are in for another roller
coaster ride in the coming week.
    * INVESTORS: Hedge funds and money managers cut their net
long position in COMEX copper in the week to Feb. 6,  U.S.
Commodity Futures Trading Commission data showed on Friday.

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    MARKETS NEWS    
    * Asian equities found a semblance of calm on Monday, with
most markets rising, as S&P futures extended their bounce,
though global investors were still fretting about the risks from
looming U.S. inflation data after last week's sharp sell-off. 
       
        
    PRICES    
    
 BASE METALS PRICES                         0730 GMT
 Three month LME copper                         6863
 Most active ShFE copper                       51710
 Three month LME aluminium                      2136
 Most active ShFE aluminium                    14315
 Three month LME zinc                         3395.5
 Most active ShFE zinc                         25940
 Three month LME lead                         2515.5
 Most active ShFE lead                         19030
 Three month LME nickel                        13075
 Most active ShFE nickel                       99810
 Three month LME tin                           21135
 Most active ShFE tin                         146300
                                                    
 BASE METALS ARBITRAGE                              
 LME/SHFE COPPER               LMESHFCUc3     1289.2
 LME/SHFE ALUMINIUM            LMESHFALc3   -1247.86
 LME/SHFE ZINC                 LMESHFZNc3     596.79
 LME/SHFE LEAD                 LMESHFPBc3     -91.78
 LME/SHFE NICKEL               LMESHFNIc3    2346.97
 

($1 = 6.3042 Chinese yuan renminbi)

    
 (Reporting by Melanie Burton; additional reporting by Tom Daly
in BEIJING; Editing by Richard Pullin and Christian
Schmollinger)
  
 
 
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