Off The Wire
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)
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