METALS-LME metals fall as survey shows deep contraction in China manufacturing - Southern Business Review


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Thursday, January 31, 2019

METALS-LME metals fall as survey shows deep contraction in China manufacturing

 (Adds Shanghai closing prices, updated London prices) BEIJING, Feb 1 (Reuters) - Most London base metals prices
dropped on Friday after a closely watched private survey showed
that factory activity in China, the world's top metals consumer,
shrank by the most in almost three years last month. The Caixin/Markit Manufacturing Purchasing Managers' Index
(PMI) for January fell to 48.3 - its worst reading since
February 2016 - from 49.7 in December. The survey came a day after China's official manufacturing
PMI showed a second straight monthly contraction but was higher
than consensus, lifting industrial metal prices along with
dovish comments from the U.S. Federal Reserve on interest rates. "Unlike the state statistics, the Caixin Manufacturing PMI
is derived exclusively from a survey of 430 private industrial
companies which is exactly the sector that the government has
been trying support for several months," John Browning, managing
director of brokerage Bands Financial, wrote in a note. FUNDAMENTALS * COPPER: Three-month copper on the London Metal Exchange was down 0.5 percent at $6,137.50 a tonne, as of 0704
GMT, having hit a seven-week high in the previous session. The
metal widely used in manufacturing and construction is heading
for a weekly rise of 1.4 percent. * SHFE: The March copper contract on the Shanghai Futures
Exchange closed up 0.5 percent at 48,270 yuan
($7,165.97) a tonne amid short-covering before the Lunar New
Year shutdown. The ShFE is now closed until Feb. 11. * COPPER: Top copper miner Codelco said it had struck a
contract deal with the union of supervisors at its Gabriela
Mistral mine in northern Chile, averting the threat of a strike. * TRADE TALKS: U.S. President Donald Trump said he will meet
with China's Xi Jinping soon to try to seal a comprehensive
trade deal, citing substantial progress in two days of
high-level talks. * ZINC: The most-traded ShFE zinc contract surged
2.5 percent to a nine-month high of 22,460 yuan a tonne before
closing on 22,395 yuan. LME zinc, which hit a
seven-month high on Thursday amid tight stocks, was down 0.3
percent. * ALUMINIUM: Aluminum Corp of China Ltd, known as Chalco, has stopped production at an
aluminium smelting plant in eastern China's Shandong province,
citing high electricity costs. * For the top stories in metals and other news, click or MARKETS NEWS * Asian shares crept back from four-month highs as a dismal
survey on Chinese factory activity dulled optimism about the
prospects for a Sino-U.S. deal on tariffs. PRICES BASE METALS PRICES 0710 GMT Three month LME copper 6145 Most active ShFE copper 48250 Three month LME aluminium 1906.5 Most active ShFE aluminium 13545 Three month LME zinc 2712.5 Most active ShFE zinc 22395 Three month LME lead 2109.5 Most active ShFE lead 17375 Three month LME nickel 12430 Most active ShFE nickel 99400 Three month LME tin 20880 Most active ShFE tin 148800 BASE METALS ARBITRAGE LME/SHFE COPPER LMESHFCUc3 293.86 LME/SHFE ALUMINIUM LMESHFALc3 -1347.93 LME/SHFE ZINC LMESHFZNc3 517.67 LME/SHFE LEAD LMESHFPBc3 378.77 LME/SHFE NICKEL LMESHFNIc3 2983.01 ($1 = 6.7360 Chinese yuan) (Reporting by Muyu Xu and Tom Daly; Editing by Richard Pullin
and Sherry Jacob-Phillips)