November 30, 2018 / 12:20 PM / 2 years ago

METALS-Copper steady as all eyes turn to G20 meeting

(Updates with closing prices)

* Zinc backwardation touches 20-year high

* GRAPHIC-2018 asset returns:

By Zandi Shabalala

LONDON, Nov 30 (Reuters) - Copper prices steadied on Friday ahead of a meeting of global leaders at the G20 summit, where a long-standing trade dispute between China and the United States is expected to take centre stage.

Tit-for-tat trade tariffs have rattled global markets and sapped demand for base metals, in some cases overriding supportive factors such as falling stocks.

“The market is, to a great extent, discounting the chance of a breakthrough in talks between the U.S. and China over the weekend,” said Commerzbank’s head of commodities research Eugen Weinberg, adding that Chinese data added to the general lacklustre performance of metals on Friday.

China’s official Purchasing Managers’ Index (PMI) fell to a 2016 low of 50 in November, missing market expectations and down from 50.2 in October.

Three-month copper on the London Metal Exchange (LME) closed 0.2 percent down at $6,198 a tonne, ending barely changed on the week.

Aluminium finished 0.9 percent up at $1,958.

TRADE DEAL: U.S. President Donald Trump, Canadian Prime Minister Justin Trudeau and Mexico President Enrique Pena Nieto signed a new trade agreement on Friday known as the United States-Mexico-Canada Agreement (USMCA).

CHALCO SUPPLY CUTS: Aluminum Corp of China (Chalco) is cutting 470,000 tonnes of annual output, it said on Friday as Chinese aluminium prices sank to a two-year low.

ALUMINIUM: Norwegian metals company Norsk Hydro expects global primary aluminium demand growth to slow next year and says it is being hit hard by a production slowdown at a key alumina plant in Brazil.

ZINC SPREADS: Falling stocks pushed the premium for cash zinc over the three month price to $101 a tonne, its highest since 1998. CMZN0-3

STOCKS: Inventories of zinc in LME-monitored warehouses are close to a 10-year low of 88,600 tonnes. In warehouses monitored by ShFE, zinc stocks fell 25 percent from last Friday to 26,779 tonnes. MZNSTX-TOTAL

CODELCO: Chile’s Codelco, the world’s largest copper producer, said mine output fell 3 percent in the first nine months of the year as ore grades fell sharply.

STEEL: The United States is moving to moderate its steel trade tariffs but countries in Europe and beyond are wary of reducing protection for their steelmakers while U.S.-China trade tensions prevail.

OTHER METALS: Zinc ended at a one-week high of $2,542 a tonne, up 2.9 percent, while lead finished 2.1 percent up at $1,970. Tin fell 0.7 percent to $18,400 and nickel gained 1.3 percent to $11,200.

Additional reporting by Tom Daly Editing by Louise Heavens and David Goodman

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