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Copper touches 2-week high on hopes of partial trade deal

Kitco News

* Zinc hits highest in more than 2 months

LONDON, Oct 11 (Reuters) - Copper rose to the highest in more than two weeks on Friday as the market awaited further news about U.S.-Sino trade talks amid optimism about a partial deal.

Zinc climbed to the strongest in over two months on worries about shortages after a shutdown of a production facility in Namibia.

A Chinese state newspaper said on Friday that a "partial" trade deal would benefit China and the United States after the first day of trade talks in more than two months.

"Until we get a definitive outcome, metals prices will drift, but I would expect to see quite a positive response (to any good news). A lot of bad news is priced into the market," said Caroline Bain, chief commodities economist at Capital Economics in London. "It's very much half-empty sentiment currently."

The 15-month long trade dispute between the United States and China has slowed global growth and dimmed the demand outlook for base metals. U.S. President Donald Trump said his plans to meet with China's Vice Premier Liu He at the White House on Friday was a good sign.

Three-month copper on the London Metal Exchange had gained 0.4% to $5,805 a tonne by 1045 GMT, the highest since Sept. 24. It jumped 1.7% in the previous session, the strongest gain in nearly four weeks.

* ZINC: LME zinc climbed 0.9% to $2,408.50 a tonne, the highest since Aug. 1. It surged more than 4% in the previous session following news about a shutdown.

* VEDANTA: Vedanta Resources said on Thursday it would shut its Skorpion zinc operations in Namibia from early November until the end of February 2020 due to technical problems. "Demand for zinc in China is expected to recover slightly in Q4 ... (because of) seasonal recovery as well as the impact from the previous stimulus policies," said CRU analyst Dina Yu.

* ZINC STOCKS: LME zinc stocks last stood at 62,475 tonnes, having dropped by more than half since the beginning of 2019. In April, zinc stocks touched a record low at 50,425 tonnes.

* ALUMINIUM STOCKS: LME on-warrant aluminium inventories, those not earmarked for delivery, rose to 797,650 tonnes, the highest since May 15. LME aluminium , the only metal in the red, slid 1.5% to $1,726 a tonne.

"We see little upside for aluminium. Even though production is quite weak, there's still more than enough aluminium around to meet demand," Bain said. Capital Economics expects the metal to end the year at $1,650.

* PRICES: LME nickel rose 0.4% to $17,690 a tonne, lead gained 1.1% to $2,182 and tin edged up 0.1% to $16,470.
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