Copper weakens ahead of Trump speech on trade

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl (Updates with closing prices)

By Zandi Shabalala

LONDON, Nov 12 (Reuters) - Copper fell to a one-week low on Tuesday ahead of a speech by U.S. President Donald Trump in which he is expected to announce a delay in auto tariffs and provide clues about the direction of the wider U.S-China trade war.

Benchmark copper on the London Metal Exchange (LME) ended down 0.2% at $5,869 per tonne, falling for a third straight day.

The months-long Sino-U.S. trade conflict has weighed on global economic growth, including in China, which accounts for about half of the world's metal demand.

Copper, widely used in power and construction and seen as a gauge of economic health, hit a two-year low of $5,518 in September.

Markets were anticipating a further delay in a decision on whether Trump will slap tariffs on cars and auto parts imported from the European Union.

Copper will be rangebound until there are clearer signals on trade, said ING Senior Commodities Strategist Wenyu Yao. "We are waiting for the tone regarding the U.S.-China talks during Trump's speech," she said.

DATA: Markets were also looking ahead to industrial production in China on Thursday, which is expected to show a slowdown in October.

INVENTORIES: Headline LME copper stocks fell 4,850 tonnes to 229,350, the lowest since June 11. LME copper stocks have been declining since August when they hit a 2019 peak. <MCUSTX-TOTAL>

SPREADS: Spreads pointed to a well-supplied market, with cash copper deepening its discount to the three-month contract <CMCU0-3> to about $18 a tonne.

SUPPLY: Most of Chile's copper miners maintained operations, albeit with some delays, amid calls for a general strike, unions and management teams told Reuters.

COLUMN: Fund short positions on the CME copper contract have shrunk over the last few weeks as the prospect of a trade deal becomes more credible.

NICKEL: Nickel prices fell for a seventh session to a three-month low after top producer Indonesia allowed nine companies to resume ore exports until year-end. Shipments were halted on Oct. 28.

Prices for the metal used to make stainless steel hit a five-year high in September after the Southeast Asian country brought forward a ban on ore exports by two years.

On Tuesday, they fell 0.6% to $15,475 a tonne, a more than two-month low.

LOCAL SALES: Indonesia's nickel miners are prepared to sell their ore to local smelters if they are offered competitive pricing compared with overseas buyers, the industry association said.

OTHER METALS: LME aluminium was steady at $1,778 a tonne, zinc shed 1% to $2,472, lead ceded 1.5% to $2,059, and tin lost 1.4% to $16,340. (Reporting by Zandi Shabalala; Additional reporting by Tom Daly in Shanghai; Editing by Jan Harvey and Jane Merriman)

First Published: 2019-11-12 04:33:42
Updated 2019-11-12 19:30:30


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