December 23, 2019 / 5:17 PM / 2 months ago

METALS-Copper steady near 7-month highs in thin trade

(Updates with closing prices)

LONDON, Dec 23 (Reuters) - Copper prices held near last week’s seven-month high on Monday as progress on a U.S.-China trade deal and improved economic data lifted some clouds from the demand outlook.

Trading activity was muted ahead of the Christmas holidays, with the London Metal Exchange (LME) closed on Dec. 25 and 26.

Benchmark LME copper finished 0.2% higher at $6,190 a tonne, up more than 5% this month in its biggest monthly gain since February.

Prices remain far below 2018 highs, before trade disputes battered the global economy.

A lack of economic news this week meant prices were likely to tread water, Chinese brokerage Citic Futures said in a note.

It said demand for copper pipe in China - the top metals consumer - had slightly increased and copper bar companies had raised their production rates, although these remained lower than a year ago.

CHINA: Industrial output in China is expected to grow by around 5.6% in 2019, the Ministry of Industry and Information Technology said on Monday. The forecast followed better-than-expected November factory data.

CHINA SCRAP: China’s imports of scrap metal in November rose by 6.3% from the previous month to 170,000 tonnes, data showed. The environment ministry also issued quotas for 2020 on Monday.

U.S. ECONOMY: Figures released on Friday showed U.S. growth rose in the third quarter, though data on Monday showed new orders for key U.S.-made capital goods barely rose in November and shipments fell.

TRADE/TARIFFS: China will lower tariffs on some products next year as Beijing looks to boost imports and economic growth.

U.S. President Donald Trump said on Saturday a ‘phase one’ U.S.-China trade pact would be signed “very shortly”. The deal was agreed earlier this month, lifting metals prices, but its full details have yet to be released.

ALUMINIUM STOCKS: On-warrant aluminium inventories in LME-registered warehouses fell to 1.2 million tonnes after 107,125 tonnes of cancellations. MALSTX-TOTAL

LME stockpiles remain higher than recent levels, but stocks in Shanghai Futures Exchange warehouses have slumped to 193,820 tonnes, the lowest in nearly three years. AL-STX-SGH

ALI SPREAD: The discount for cash aluminium versus three-month metal on the LME widened to $26.75, the most since September, pointing to more plentiful nearby supply. MAL0-3

PRICE: Benchmark aluminium ended 0.2% higher at $1,804 after touching a six-week high.

ZINC: LME zinc closed down 2.1% at $2,291, giving up the previous week’s gains as a rise in Chinese smelter processing charges to $310 suggested output of refined metal would increase. SMM-ZNCONC-IMP

INDEX REBALANCING: Commodities tracking funds The Bloomberg Commodity Index (BCOM) and the S&P GSCI Index (GSCI) are likely to buy zinc and aluminium and sell nickel during their annual rebalancing in early January, Citi analysts said.

OTHER METALS: LME nickel ended 1.2% lower at $14,350, lead fell 1.1% to $1,916 and tin finished 0.2% lower at $17,300.

Reporting by Peter Hobson in LONDON and Tom Daly in BEIJING; editing by Jason Neely

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