August 15, 2018 / 8:08 AM / 2 years ago

METALS-LME copper hits 1-yr low as Chile mine union plans to avert strike

(Recasts, changes comment, and updates prices)

BEIJING, Aug 15 (Reuters) - London copper prices dropped to their lowest in more than a year on Wednesday as the dollar strengthened and the union for Chile’s Escondida, the world’s largest copper mine, said it will avert its planned strike after operator BHP offered a renewed contract proposal.

The union’s president, Patricio Tapia, told Reuters it would consult its members about the new contract proposal, which came after days of closely watched negotiations, amid fears of a repeat of last year’s strike at Escondida, which dragged on for 44 days.

Base metals fell across the board in a broad sell-off on Wednesday as investors remain concerned over a slowdown in the economy of top metals consumer China.

“There will be no blockbuster economy-supporting initiative (by China) ... not at least until after the U.S. election” in 2020, said John Browning, managing director of brokerage Bands Financial. “So, copper is on its own, and in the short term, only supply disruption can force the price higher,” he added.

FUNDAMENTALS

* LME COPPER: Three-month LME copper fell as much as 1.9 percent to $5,928 a tonne, its lowest since July 2017, and stood at $5,943.50 a tonne, as of 0713 GMT.

* SHFE COPPER: The most-traded October copper contract on the Shanghai Futures Exchange closed down 2.3 percent at 48,550 yuan ($7,036.84) a tonne, having earlier touched 48,240 yuan, its lowest since July 20.

* ZINC: LME zinc, used to galavise steel, dropped as much as 2.2 pct to $2,399.50, its weakest since October 2016, while the most traded ShFE zinc contract fell as much as 3 percent before closing down 2.2 percent.

* OTHER METALS: London lead slipped as much as 1.4 percent to $2,045 a tonne, its lowest since May 2017. Shanghai nickel fell as much as 3 percent before closing 2.4 percent lower.

* USD: The dollar hit a 13-month high against a basket of major currencies as safe-haven demand rooted in fears over fallout from the Turkish lira’s recent drop boosted the U.S. currency. A stronger dollar makes metals more expensive for holders of other currencies.

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MARKETS NEWS

* Asian stocks retreated to a one-year low on Wednesday as bearish Chinese markets worsened investor sentiment already hurt by Turkey’s financial crisis.

PRICES

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 = 6.8994 Chinese yuan)

Reporting by Tom Daly; additional reporting by Melanie Burton in MELBOURNE; Editing by Subhranshu Sahu and Sherry Jacob-Phillips

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