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METALS-Copper recovers some lost ground but demand concerns weigh

Published 25/02/2017, 02:10 am
© Reuters.  METALS-Copper recovers some lost ground but demand concerns weigh
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* Copper heads for second straight weekly drop

* Demand doubts counter supply pinch in Chile, Indonesia

* GRAPHIC-2017 metal returns: http://tmsnrt.rs/2eqHKkL (Updates prices)

By Jan Harvey

LONDON, Feb 24 (Reuters) - Copper clawed back some of the previous session's hefty losses on Friday as supply disruptions in Chile and Indonesia lent support, but stayed on track for a second straight weekly drop as concerns over the demand outlook weighed.

The metal used in construction fell 3 percent on Thursday, its biggest one-day drop in 17 months, as traders flagged persistent worries over Chinese consumption. investors also cashed in after copper hit a 21-month high of $6,204 on Feb. 13 on supply outages from major copper mines and hopes a pledge by the administration of U.S. President Donald Trump to lift infrastructure spending would fuel demand.

The metal remained well off its February peak on Friday.

Three-month copper on the London Metal Exchange CMCU3 was up 1 percent at $5,922 a tonne at 1505 GMT, but was set to end the week 0.6 percent lower.

"All the signs coming out of China are that the authorities are committed to reining in credit growth this year, rather than stimulating economic growth at all costs. That would be negative for copper," Capital Economics analyst Caroline Bain said.

"Yes, there are supply disruptions, but stocks are also very high," she added. "Copper started to rally after Trump got elected in the U.S. There was optimism there about demand, given his fiscal stimulus plans ... We think again there'll be disappointment about demand on that front."

China's refined copper imports fell 14 percent last month, Chinese customs data showed on Friday. action at the Escondida copper mine in Chile, which accounts for about 6 percent of world supply, lent support.

Operator BHP Billiton BHP.AX BLT.L this week delayed its legal right to replace striking workers, a move seen as sacrificing output to undermine the union's position. halt to the Grasberg copper mine in Indonesia by Freeport McMoRan FCX.N was also giving copper bulls solace.

"Given their size, lengthy disruptions at either will eat into this year's normal 5 percent disruption allowance," GFMS analysts at Thomson Reuters said in a recent report.

"But unless accompanied by other major disruptions, they are still unlikely to prevent another year of surplus."

Zinc CMZN3 was 1 percent higher at $2,817 a tonne. Zinc prices are still nearly double levels seen in January 2016 due to deficits arising from mine closures and shutdowns.

Nickel CMNI3 was up 2 percent at $10,785 a tonne, while tin CMSN3 was 2.4 percent higher at $19,225 a tonne. Aluminium CMAL3 was up 0.8 percent at $1,881 a tonne, and lead CMPB3 was up 0.5 percent at $2,248 a tonne.

PRICES

Three month LME copper

CMCU3

Most active ShFE copper

SCFcv1

Three month LME aluminium

CMAL3

Most active ShFE aluminium

SAFcv1

Three month LME zinc

CMZN3

Most active ShFE zinc

SZNcv1

Three month LME lead

CMPB3

Most active ShFE lead

SPBcv1

Three month LME nickel

CMNI3

Most active ShFE nickel

SNIcv1

Three month LME tin

CMSN3

Most active ShFE tin

SSNcv1

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-2017 metal returns:

http://tmsnrt.rs/2eqHKkL

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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