Off The Wire
METALS-Zinc hits two-week low on worries about China-U.S. trade
* No talks between Trump and Xi before March trade deadline
* Speculators target zinc after breached technical level
* GRAPHIC-2019 asset returns: (Updates with closing prices)
By Eric Onstad
LONDON, Feb 11 (Reuters) - Zinc slumped to a two-week low on
Monday falling along with other industrial metals as speculators
sold in response to concerns about U.S.-China trade talks and
global growth.
China expressed anger on Monday at a U.S. Navy mission
through the disputed South China Sea after U.S. President Donald
Trump said last week that he did not plan to meet with Chinese
President Xi Jinping before a March 1 deadline for a trade deal. Chinese investors, returning after a week-long national
holiday, seemed to focus more on downbeat news rather than
optimism expressed by China on Monday about a new round of trade
talks with the United States.
"You had seen quite a run-up in base metals prices, with
lots of positivity on the trade negotiations, and now that
balloon seems to have been punctured somewhat," said Ross
Strachan, senior commodities economist at Capital Economics in
London.
"There seems to be more realisation that trying to get a
permanent long-term deal between those two parties is extremely
difficult to imagine."
Benchmark zinc on the London Metal Exchange had shot
up by nearly a fifth in the month to Feb. 5, when it touched a
seven-month peak of $2,810 a tonne.
Since then, however, it has slipped 6 percent and was the
biggest LME decliner on Monday. It fell 2.2 percent in closing
open outcry activity to $2,644 a tonne, having earlier touched
$2,631, the lowest since Jan. 25.
* ZINC STOCKS: Investors apparently brushed off news that
LME zinc inventories have eroded further to their
lowest since January 2008.
* ZINC TECHNICALS: Zinc attracted additional selling because
of a weak chart picture, Marex Spectron's Matt France said in a
note. "Zinc looks most vulnerable technically as it has breached
the 200-day moving average at $2,660."
* COPPER: Three-month LME copper shed 1 percent to
finish at $6,150 a tonne after Chilean state miner Codelco said
on Saturday that it hoped to restart operations soon at its
Chuquicamata copper mine.
* LEAD: LME lead gave up 1.7 percent to close at a
two-week low of $2,045.50 a tonne.
A pullback in lead is expected to be short-lived, Stéphanie
Aymes, head of technical analysis at Societe Generale, said in a
note. "Once a move beyond $2,132/35 takes shape, lead will
extend the recovery towards $2,185 and perhaps even towards the
May 2018 trough at $2,241/28."
* DOLLAR: Also weighing on metals was a stronger dollar,
making dollar-denominated metals more expensive for holders of
other currencies.
* PRICES: Aluminium closed unchanged at $1,880 a
tonne, nickel fell 0.6 percent to $12,490 and tin eased by 0.1 percent to $21,025.
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(Additional reporting by Enrico Dela Cruz in Manila and Muyu Xu
in Beijing. Editing by Louise Heavens and David Goodman)