November 11, 2019 / 11:53 AM / 3 months ago

METALS-Copper slides as China data weighs on sentiment

* GRAPHIC-2019 asset returns:

* Chinese industrial output and investment data on the radar (Adds closing prices)

By Pratima Desai

LONDON, Nov 11 (Reuters) - Copper prices slipped on Monday as weak data from top consumer China reinforced poor demand and growth prospects, with the prolonged U.S.-China trade dispute undermining economic activity globally.

Benchmark copper on the London Metal Exchange ended 0.8% lower at $5,878 a tonne. Prices of the metal used by investors as a gauge of economic health hit 15-month highs of $6,011 last week on hopes for an end to the trade war.

“At the moment it’s to do with the trade war and how that develops,” said Commerzbank analyst Daniel Briesemann. “The market is waiting for Chinese industrial production and investment data due later this week.”

DATA: China’s producer price index, seen as a guide to corporate profitability, fell 1.6% in October from a year earlier, marking the steepest decline since July 2016, official data showed.

New bank loans in China fell more than expected to the lowest in 22 months in October. Loans are used as a yardstick of activity among smaller and private companies which generate a sizeable share of Chinese growth and jobs.

Chinese industrial output and investment data for October are due Thursday. Both are highly correlated with metals demand.

TRADE: Optimism about a trade deal faded after President Donald Trump said he has not agreed to rollbacks of U.S. tariffs sought by China.

TECHNICALS: Support for copper stands at the 21-day moving average currently at $5,861, followed by the 100-day moving average at $5,833.

NICKEL: Prices of the stainless steel ingredient fell to $15,500, the lowest since August and a drop of more than 15% since early September. They ended down 3.9% at $15,565.

Nervousness about supplies from top exporter Indonesia faded after the government allowed nine companies to resume nickel ore exports following reports of ore export rules violations and inspections.

However, historically low stocks of nickel - around 65,000 tonnes - in LME-registered warehouses are a concern for users of the market MNISTX-TOTAL looking for nearby delivery.

This is why the premium for the cash over the three-month contract hit $214 a tonne at the start of October. The premium is now a discount of $1, but traders say more nickel needs to go on LME warrant for larger discounts CMNI0-3.

ALUMINIUM: Focus is also on the $14 a tonne premium CMALZ19-3 for December aluminium over the three-month contract, which has been ticking up for a few days.

Traders say it is needed to attract the large amounts of metal that need to be delivered to buyers.

PRICES: Three-month aluminium was down 1.6% to $1,779 a tonne, zinc rose 0.6% to $2,496.50, lead fell 0.8% to $2,090 and tin ceded 0.8% to $16,575. (Reporting by Pratima Desai; editing by Louise Heavens, Chizu Nomiyama and Jan Harvey)

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