February 17, 2020 / 5:27 AM / in 2 months

METALS-Copper prices hit 3-week highs on China stimulus

 (Updates prices, adds details)
    By Mai Nguyen
    Feb 17 (Reuters) - Copper prices touched three-week highs on
Monday as top consumer China lowered a key interest rate to
cushion the impact from the coronavirus outbreak.
    China's central bank lowered the rate on 200 billion yuan
worth of one-year medium-term lending facility (MLF) loans. The
bank said on Saturday Chinese lenders will tolerate a higher
level of bad loans to support firms hit by the epidemic, which
has killed over 1,700 people and infected about 70,550 in China.
    "The MLF cut is to try to bring the official rate closer to
the shadow banking rates, so that less bad loans will surface in
the future," a Singapore-based metals trader said.
    "Copper getting bid up ... is a testament to a sub-section
in the economy used as a conduit to get loans for firms to
refinance other liability or just to operate," the trader said.
    Three-month copper on the London Metal Exchange (LME)
        touched a three-week peak of $5,828.50 a tonne in early
trade. It was up 0.9% at $5,812.50 a tonne by 0730 GMT.
    The most-traded copper contract on the Shanghai Futures
Exchange (ShFE)          closed up 1% at 46,310 yuan 
($6,633.72) a tonne, the highest since Jan. 23. 
    * PRICES: LME aluminium         dipped 0.2% to $1,719 a
tonne, nickel         rose 1.3% to $13,190 a tonne and zinc
        climbed 0.7% to $2,164.50 a tonne. ShFE aluminium
         fell 0.4% to 13,645 yuan a tonne and nickel         
dropped to as low as 104,300 yuan a tonne, the lowest in nearly
a week.
    * NICKEL: The difference between LME cash over the three
month nickel contract MNI0-3 has been at discount since
mid-November, signaling amply nearby supplies.
    * Fitch Solutions lowered its forecast for LME three-month
nickel price in 2020 to an average of $14,000 a tonne, from
$15,000 previously, on easing supply concerns and negative
sentiment on metals due to the virus outbreak.
    * AUTOS: China's auto market, the world's largest, could see
sales slide over 10% in the first half of 2020 due to the
epidemic, its top auto industry body said.             
    * For the top stories in metals and other news, click       
    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                             

($1 = 6.9810 Chinese yuan renminbi)

 (Reporting by Mai Nguyen; Editing by Aditya Soni and Sherry
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