April 4, 2019 / 9:52 AM / 10 months ago

METALS-Copper falls as German factory data adds to demand worries

(Updates throughout, moves dateline from SINGAPORE)

By Peter Hobson

LONDON, April 4 (Reuters) - Copper prices fell on Thursday as weak German factory data underlined concerns about the outlook for demand and a big inflow of metal into London Metal Exchange (LME) warehouses suggested supply was adequate.

Most other industrial metals also slipped despite positive signals from U.S.-China trade talks.

Benchmark copper on the LME was down 0.4 percent at $6,469 a tonne at 1031 GMT.

The metal, used in power and construction, rose from an 18-month low of $5,736 in January on hopes that China, the largest consumer, could prevent a sharp economic downturn, but prices have remained stuck around current levels since late February.

“$6,500 appears to be a bit of a barrier,” said Capital Economics analyst Ross Strachan.

Copper supply is tight, but deteriorating economic growth in Europe, China and the United States will sap demand, he said, predicting prices would fall slightly over the year.

GERMAN FACTORIES: German industrial orders fell by 4.2 percent, their sharpest rate in more than two years, in February, hit by a slump in foreign demand.

TRADE TALKS: U.S.-China trade talks made “good headway” last week and the two sides aim to bridge differences during talks that could extend beyond three days this week, White House economic adviser Larry Kudlow said.

LAS BAMBAS: A Peruvian judge ordered three years of jail time for three lawyers representing indigenous villagers who have blockaded shipments from a massive copper mine, worsening the dispute.

COPPER STOCKS: Copper inventories in LME-registered warehouses leaped by 30,375 tonnes to 198,325 tonnes, the highest in six months and nearly double the level three weeks ago. MCUSTX-TOTAL

Inventories have also risen in China. Total stockpiles in LME, Comex, Shanghai Futures Exchange CU-STX-SGH and Chinese bonded warehouses have risen by close to 300,000 tonnes this year, according to analysts at Barclays.

COPPER SPREAD: Cash copper on the LME has flipped from hefty premium over the three-month contract CMCU0-3 to an $8 discount, suggesting a shortage of nearby metal has eased.

TIN: LME tin was down 0.4 percent at $21,100 a tonne, even with stocks in LME warehouses at a record low of 920 tonnes MSNSTX-TOTAL. The premium for cash tin over three-month metal CMSN0-3 jumped to $140 from $49 on Monday, pointing to a shortage of immediately available metal.

PHILIPPINES NICKEL: Global Ferronickel Holdings Inc , the Philippines’ second-largest nickel ore producer, said it had opened a third mining area at its Cagdianao mine.

CHINA HOLIDAY: The Shanghai Futures Exchange will be closed on Friday for the Tomb Sweeping Day holiday in China.

OTHER METALS: LME aluminium was flat at $1,895.50 a tonne, nickel was down 1.1 percent at $13,185, zinc rose 0.1 percent to $2,933.50 and lead fell 0.1 percent to $2,009.50.

Reporting by Peter Hobson; additional reporting by Mai Nguyen and Tom Daly; editing by David Evans

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