December 27, 2019 / 3:47 PM / 5 months ago

METALS-Copper near 8-month high on China data and trade deal hopes

* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl (Adds closing prices)

By Zandi Shabalala

LONDON, Dec 27 (Reuters) - Copper prices hit their highest since May on Friday after profits at industrial companies in top metals consumer China grew at their fastest pace in eight months and as Beijing and Washington moved closer to an initial trade deal.

“(There’s) broader optimism on copper building over the last few months,” a senior trader said, adding the Chinese data added to the market’s buoyancy.

“A simmering down in trade tensions should be good for the world economy but a full and final settlement doesn’t look imminent,” he said.

Upbeat economic data from China bodes well for metals demand as the country accounts for about half of global consumption.

Meanwhile, China’s commerce ministry said a phase one deal that would end a protracted trade war with the United States was within sight.

Benchmark copper on the London Metal Exchange (LME) touched a session high of $6,266.50 a tonne, its highest since May 7. But prices ended steady at $6,214 a tonne, in a week where volume was thinned by holidays.

Prices for the metal used in power and construction still logged a weekly gain of 0.6%, their sixth straight weekly rise and the longest winning streak in over two years.

CHINA: China’s top copper smelters raised their floor treatment and refining charges for the first quarter of 2020 to $67 a tonne and 6.7 cents a pound, people with knowledge of the matter said, citing output cuts at two Chinese companies.

INVENTORIES: Copper stocks in warehouses approved by the LME dropped to 147,350 tonnes, the lowest since March 13. In warehouses monitored by the Shanghai Stock Exchange, stocks fell 4.2% from the previous week to 123,647 tonnes. MCUSTX-TOTAL CU-STX-SGH

ZAMBIA: Zambia plans to make copper mining companies account for the gold they produce as it seeks to boost revenue from its mineral resources, a senior ministry of mines official said on Thursday.

JAPAN: Premiums for aluminium shipments to Japan for the first quarter of 2020 were set at $83 per tonne, down 14% from the previous quarter amid soft demand from electronics and auto companies, sources said.

Japan is Asia’s biggest importer of the light metal.

NICKEL STOCKS: Stocks of nickel in warehouses approved by the LME have more than doubled over the last three weeks to 143,190 tonnes. MNISTX-TOTAL

This helped push the discount of the cash contract to the three-month to $73.52 a tonne on Friday, its deepest since July 3. CMNI0-3

OTHER METALS: Aluminium was up 0.6% to $1,825 a tonne, after touching its highest since Sept. 12, zinc gained 1.4% to $2,305 and lead slipped 0.4% to $1,939.

Tin was steady at $17,120 per tonne, while nickel fell 0.9% to $14,210. (Additional reporting by Tom Daly in Beijing; Editing by Mark Potter and Emelia Sithole-Matarise)

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