METALS-Copper shrugs off Iran attack to rise for 3rd day amid low stocks

Iran launched a missile attack on U.S.-led forces in Iraq on Wednesday, hours after the funeral of an Iranian commander whose killing in a U.S. drone strike has raised fears of a wider war in the region. The base metals complex initially tracked equity markets lower as investors switched into safe-haven assets such as gold, but subsequently clawed back ground. "So far the metals have reacted to the news ... without too much drama," Malcolm Freeman, director of Kingdom Futures, wrote in a note.

"But it is very much a case of the markets in general holding their metaphoric breath until we find out what, if any, response the (United States) will make," he added.

FUNDAMENTALS
* COPPER: Three-month copper on the London Metal Exchange fell as much as 0.6% to $6,115 a tonne before recovering to trade 0.5% firmer at $6,177, as of 0709 GMT. The most-traded March copper contract on the Shanghai Futures Exchange ended flat at 48,860 yuan ($7,038.22) a tonne.

* CHILE: Copper output slumped at Chile's state miner Codelco and BHP's sprawling Escondida mine in November, according to Chile state copper agency Cochilco, amid a turbulent month of riots and mass protests.
* STOCKS: LME copper stocks of just 140,925 tonnes, the lowest since March, were limiting any price fall.
* IRAN: The metals complex is a "play of its own, less oil-related and less freight-related," one trader said of the potential impact of the Mideast tensions. Oil prices were about 1% higher but well below highs hit in a frenetic start to the trading day.
* GOLD: Gold soared as much as 2% to vault over the $1,600 ceiling for the first time in nearly seven years.
* USD: The dollar index fell by 0.1% to 96.948. A weaker greenback makes dollar-denominated metals cheaper for holders of other currencies and can support prices.
* RMB: "Base metals found support in the firmer yuan, which reached a five-month high, with China appearing more occupied with the upcoming trade deal due to be signed on Jan. 15," Marex Spectron wrote in a note. A stronger yuan makes metals cheaper for Chinese buyers.
* COPPER: The copper price is unlikely to rebound in 2020 even if Sino-U.S. trade tensions subside, the head of Chile mining trade union Sonami said.
* OTHER METALS: Nickel fell as much as 1.3% but rebounded to trade flat. Aluminium and lead added 0.4%, while zinc rose 0.5%. Tin was the laggard, losing 0.3%.

PRICES BASE METALS PRICES 0716 GMT Three month LME copper 6174 Most active ShFE copper 48860 Three month LME aluminium 1822.5 Most active ShFE aluminium 14155 Three month LME zinc 2358 Most active ShFE zinc 18365 Three month LME lead 1914 Most active ShFE lead 14945 Three month LME nickel 13920 Most active ShFE nickel 109190 Three month LME tin 16950 Most active ShFE tin 135560
BASE METALS ARBITRAGE
LME/SHFE COPPER LMESHFCUc 486.47 3
LME/SHFE ALUMINIUM LMESHFALc -334.45 3
LME/SHFE ZINC LMESHFZNc -341.21 3
LME/SHFE LEAD LMESHFPBc -488.31 3
LME/SHFE NICKEL LMESHFNIc -2301.05 3
($1 = 6.9421 Chinese yuan) (Reporting by Tom Daly; Editing by Michael Perry and Sherry Jacob-Phillips)