December 4, 2019 / 11:26 AM / 6 months ago

METALS-Copper prices rise on trade deal prospects

    * GRAPHIC-2019 asset returns:
    * LME index hovers near lowest since 2017 

 (Updates with closing prices, Trump commments)
    By Zandi Shabalala
    LONDON, Dec 4 (Reuters) - Copper rose on Wednesday on
reports of progress towards an initial U.S.-China trade deal,
though gains were capped by scepticism in some quarters.
    Bloomberg reported that the United States and China were
moving closer to agreeing on the amount of tariffs to be rolled
back in a "phase one" trade deal and U.S. President Donald Trump
said talks were going well.                         
    This was a more positive tone than his comments the previous
day, when Trump warned that a deal may not be possible until
late next year, pushing copper prices to their lowest in almost
three weeks.                         
    "We are seeing a short rebound in some metals today, but
it's a rebound from low levels," said Commerzbank's head of
commodities research, Eugen Weinberg.
    He added that the trade talks were "making one step forward
and one and a half steps back".
    Benchmark copper prices on the London Metal Exchange
(LME)        ended 1.2% higher at $5,886 a tonne after shedding
1.1% in the previous session.
    The LME index         hit its lowest in three months,
putting it within striking distance of the weakest since
    TRADE: Progress in talks bodes well for metals demand,
particularly for copper, which is usually viewed as a gauge for
economic health. China accounts for about half of metals demand.
    INVENTORIES: Copper stocks in LME-registered warehouses fell
to their lowest in nearly seven months, shedding 1,100 tonnes to
114,000 tonnes. MCUSTX-TOTAL
    However, spreads were unaffected by LME supply tightness,
with the discount between LME cash copper and the three-month
contract deepening to $25 a tonne from $7.50 nearly a month ago
    SCRAP: China has issued a seventh batch of import quotas for
scrap metal, including 17 quotas for a total of 7,970 tonnes of
high-grade copper scrap, according to a notice from a unit of
the environment ministry.             
    RIO TINTO: Miner Rio Tinto         said it would spend $1.5
billion to expand its Kennecott copper project in Utah, United
    COBALT: South Korean battery maker SK Innovation            
signed a six-year deal to buy up to 30,000 tonnes of cobalt from
Glencore         , allowing it to produce batteries for 3
million electric vehicles.             
    NICKEL SUPPLY: Brazil's Vale SA            plans to exit its
troubled New Caledonia assets but still aims to ramp up nickel
output ahead of rising demand for electric batteries, executives
said on Wednesday.             
    COLUMN: Copper smelters feel the squeeze as mine supply
    PRICES: LME aluminium         slipped 0.5% to $1,758 a
tonne, zinc         rebounded from a four-month low in the
previous session, gaining 2% to $2,245, while lead         edged
up 1.2% to $1,922. Tin         was unchanged at $16,750 and
nickel         lost 1.9% to $13,120.

 (Reporting by Zandi Shabalala
Editing by Edmund Blair and David Goodman)
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