June 29, 2017 / 7:51 AM / 3 years ago

METALS-London copper hits near 3-month high as dollar falls

 (Updates prices)
    By Melanie Burton
    MELBOURNE, June 29 (Reuters) - London copper punched through
a key technical level on Thursday as falling supply and a weaker
dollar lifted prices to their highest since April.
    The U.S. dollar index slid after hawkish comments by
the Bank of England added to expectations the European Central
Bank would raise rates. A weaker dollar encourages metals
demand, making the dollar-priced commodity more affordable for
buyers paying with other currencies.
    "The risk-on-tone saw the USD weaken, which supported
investor appetite in base metals," ANZ said in a report.
    "This was followed up with data suggesting the markets are
tightening up. Inventories across the sector continue to fall,
while the appointment of a new environmental minister in China
aroused fears of more capacity closures."
    
    FUNDAMENTALS
    * COPPER: London Metal Exchange copper had climbed
0.9 percent to $5,937.50 a tonne by 0727 GMT. Prices earlier
marked their strongest since April 5 at $5,943.50 a tonne.
    * CHARTS: Prices have broken through the 200-day moving
average on their weekly chart, a key buy signal for
chart-following funds, for the first time since February. The
last time copper prices traded and held above this level was
prior to March 2013.
    * LME COPPER: LME copper stockpiles have fallen to just
under 250,000 tonnes, the smallest since early March and down by
nearly 100,000 tonnes since early May.
    * SHFE COPPER: Shanghai Futures Exchange copper
rallied 1.3 percent to 47,430 yuan ($6,999) a tonne. Prices
broke back above the 100-day moving average for the first time
since March. 
    * China on Tuesday appointed a new environment minister who
has promised a "protracted battle" to clean up the nation's
notoriously polluted air, water and soil.
    * LEAD: LME lead also approached three-month highs
as mine supply shrinks and China imports more metal. 
    * There is one party holding between 40-50 percent of LME
lead stocks, <0#LME-WHL>, while there is a large short position
of <0#LME-FBR> between 20-29 percent of outstanding futures
positions in the July contract, LME data shows. This suggests
there is a smaller pool of lead to deliver if the short holder
wants to close their position and may be a factor driving up
prices.
    * NICKEL: A ban on open-pit mining in the Philippines
enforced by a former environment minister has "no legal basis"
and is under review, a senior government official said.
 A reversal of the ban could undermine nickel prices
which remained up 0.7 percent up $9340 a tonne. 
    * COPPER: Mining companies operating in Chile are examining
restarting projects that were put on hold in recent years due to
a copper price slump, the mining minister and industry
executives said, though final investment decisions will wait
until political uncertainty lifts after the November
presidential elections.

 BASE METALS PRICES           0734 GMT              
 Three month LME copper                   5937      
 Most active ShFE copper                  47410     
 Three month LME aluminium                1906.5    
 Most active ShFE aluminium               13985     
 Three month LME zinc                     2759      
 Most active ShFE zinc                    22630     
 Three month LME lead                     2314      
 Most active ShFE lead                    17735     
 Three month LME nickel                   9340      
 Most active ShFE nickel                  76780     
 Three month LME tin                      19570     
 Most active ShFE tin                     145160    
                                                    
 BASE                                               
   METALS ARBITRAGE                                 
 LME/SHFE COPPER              LMESHFCUc3  526.24    
 LME/SHFE ALUMINIUM           LMESHFALc3  -1051.89  
 LME/SHFE ZINC                LMESHFZNc3  347.84    
 LME/SHFE LEAD                LMESHFPBc3  -1332.93  
 LME/SHFE NICKEL              LMESHFNIc3  2148.52   
 ($1 = 6.7770 Chinese yuan)

    
 (Reporting by Melanie Burton; Editing by Joseph Radford and
Vyas Mohan)
  
 
 
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