Off The Wire
METALS-Copper rebounds on bargain hunting, trade tensions weigh
* GRAPHIC-2019 asset returns: (Updates with closing prices) By Zandi Shabalala LONDON, May 14 (Reuters) - Copper rebounded on Tuesday as investors emboldened by solid supply and demand fundamentals sought bargains after tit-for-tat trade tariffs between the United States and China triggered a fall in prices. China said on Monday that it would impose higher tariffs on most U.S. imports on a revised $60 billion target list, hitting back at a U.S. tariff increase on $200 billion worth of Chinese goods, only days after markets were expecting a trade deal. Benchmark copper on the London Metal Exchange ended 0.3% up at $6,027 a tonne after touching a 15-week low the previous day. "There is inherent uncertainty from a macro perspective but from a supply-demand basis this would be a buying opportunity," said Deutsche Bank analyst Nick Snowdon.
"For the time being there will be a bit of caution until we see some stability in the trade war."
TRADE WAR: China and the United States have the "ability and
wisdom" to reach a trade deal that is good for both, China's top
diplomat said, while U.S. President Donald Trump said he thought
recent talks in Beijing would be successful. ELECTRIC VEHICLES: The United States faces stiff challenges
as it moves to create its own electric vehicle supply chain,
industry analysts say, with the extent of the country’s metal
reserves largely unknown and only a few facilities to process
minerals and produce batteries. ZINC SPREADS: The premium of cash zinc over the three-month
contract hit its highest since 1997 at $141, signalling
worries about nearby supply, owing to large holdings of warrants
and cash contracts. However, zinc prices in the second half of 2019 are expected
to drop as Chinese smelters' output will increase further in the
second half of this year.
* ZINC TECHNICALS: LME zinc , which closed 1.1% higher at $2,594 a tonne, was likely to stabilise around its 200-day moving average at $2,529.50, Commerzbank technical analysts said in a note. PRICES: Three-month aluminium rose 2% to $1,845 a tonne, lead added 1% to $1,802.5, tin gained 2.4% to $19,795 while nickel was bid up 1.1% to $11,900.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Top Base and Precious Metals Analysis - GFMS LME ZINC SPREAD ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional Reporting by Mai Nguyen in Singapore, Eric Onstad in London; Editing by Ed Osmond and David Goodman)
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