Aluminum and Copper

Signs of tight supply push copper and zinc higher

Signs of tight supply push copper and zinc higher
Mining News Pro - By Peter Hobson LONDON, Nov 16 (Reuters) - Copper rose on Friday as signs of supply tightness supported prices, but worries about the outcome of the U.S.-China trade dispute limited gains.
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According to Mining News Pro -(Updates with closing prices) By Peter Hobson LONDON, Nov 16 (Reuters) - Copper rose on Friday as signs of supply tightness supported prices, but worries about the outcome of the U.S.-China trade dispute limited gains.

Supply shortages also powered zinc towards its biggest weekly gain since September.


Benchmark copper on the London Metal Exchange closed up 0.3 percent at $6,205 a tonne, 2.4 percent higher this week. Prices rallied after news that Chinese smelter Jiangxi Copper and miner Antofagasta had agreed lower treatment and refining charges for 2019, said ING analyst Warren Patterson. "This is showing that either there is a tightening in concentrate supply or too much spare smelting capacity in China. I think it`s a mixture of the two," he said.


China is the world`s biggest consumer of metals. Metals received a further boost when the U.S. dollar weakened after Federal Reserve officials appeared to question the pace of interest rate rises and from strong U.S. manufacturing data. A weaker dollar makes metals cheaper for buyers who hold other currencies.


But while supply-demand fundamentals were good for copper, uncertainty about U.S.-China trade talks -- which has helped push metals prices sharply lower since the summer -- were still weighing on prices, Patterson said.


COPPER STOCKS: Headline copper inventories in LME-registered warehouses fell by 5,425 tonnes to 161,025 tonnes, nearing last month`s 10-year low of 136,675 tonnes.


SPREAD: Another signal of tight supply is the premium of cash copper over the three-month contract , which has drifted from a near four-year high of $47 last month to $18.50 but is still far above recent norms. TECHNICALS: Copper was holding above its technically important 50-day and 100-day moving averages around $6,160-$6,165.


U.S.-CHINA TRADE TALKS: A senior White House official told Reuters a written response sent this week by China to U.S. demands for trade reforms was unlikely to trigger a breakthrough at talks. ZINC: Benchmark LME zinc closed 1.2 percent higher at $2,607 a tonne, up 3.5 percent this week, with stockpiles in the LME`s warehouse system falling to a 10-1/2-year low of 125,400 tonnes. SPREAD: The premium of cash zinc over three-month metal has surged to $78.75, the highest since October last year, from a discount of more than $20 two months ago, suggesting a shortage of available material.


OTHER METALS: LME aluminium finished up 0.6 percent at $1,940 a tonne, nickel ended 0.9 percent higher at $11,360, lead gained 3.6 percent to $1,998 and tin closed down 0.2 percent at $19,350.


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