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Copper rebounds as China's factory activity returns to growth

Kitco News

(Updates prices)

By Naveen Thukral SINGAPORE,

Dec 2 (Reuters) - London copper prices bounced back on Monday, with the market supported by factory activity returning to growth in top industrial metals consumer China. Three-month copper on the London Metal Exchange added 0.6% to $5,900.50 a tonne by 0705 GMT and the most-traded copper contract on the Shanghai Futures Exchange was up 0.04% at 47,300 yuan ($6,719.80)a tonne.

MANUFACTURING: Factory activity in China unexpectedly returned to growth in November for the first time in seven months, as domestic demand picked up on Beijing's accelerated stimulus measures to steady growth. SURPRISING: "We expected some improvement in domestic new orders, but the data has surprised us by coming earlier than our expectations," ING said in a note.

NEW ORDERS: "One of the major pushes of new orders is that infrastructure investment has moved from the investment stage to the production stage. This will continue to give support to new orders in the coming year."

EXPORT DEMAND: But gains were slight, and export demand remained sluggish. More U.S. tariffs are looming within weeks and Beijing and Washington are still haggling over the first phase of a trade deal.

TARIFFS: Beijing's top priority in any phase one trade deal with the United States is the removal of existing tariffs on Chinese goods, China's Global Times newspaper reported on Sunday, amid uncertainty on whether the two sides can end a 17-month trade war that has depressed global growth.

PROTESTERS: A new U.S. law backing Hong Kong protesters has prompted concerns that the move could torpedo efforts to end the trade war.

HEAVY METALS: Major metals producer and consumer China has shut more than 1,300 heavy metal enterprises since 2016 as part of a long-term plan to curb widespread chronic soil pollution, an environment ministry official said.

EARNINGS: Codelco, the world's largest copper producer, reported a fall of 57% in its pre-tax earnings to September due to climate factors, a strike at its Chuquicamata mine in Chile and lower metal prices.

ALUMINIUM: A global aluminium producer has offered Japanese buyers a premium of $92 per tonne for January-March primary metal shipments, down 5.2% from the current quarter, four sources directly involved in quarterly pricing talks said on Friday. Japan is Asia's biggest importer of the metal used in packaging and aircraft.

PRICES Three month LME copper Most active ShFE copper Three month LME aluminium Most active ShFE aluminium Three month LME zinc Most active ShFE zinc Three month LME lead Most active ShFE lead Three month LME nickel Most active ShFE nickel Three month LME tin Most active ShFE tin ARBS ($1 = 7.0389 Chinese yuan) (Reporting by Naveen Thukral; Editing by Sriraj Kalluvila)

Messaging: naveen.thukral.thomsonreuters.com@reuters.net))

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