Base metals edge higher on hopes of trade war truce progress

MELBOURNE/BEIJING, Dec 17 (Reuters) – Most base metals rose on Monday, starting the new week with cautious optimism that China and the United States will be able to resolve a trade row that has weighed on prices for most of this year, although weak economic indicators capped gains. China’s retail sales grew at their weakest pace since 2003 and its industrial output rose the least in nearly three years, according to official data released last week. Investors are now focusing on a speech by Chinese President Xi Jinping to mark the 40th anniversary of China’s reform and opening up on Tuesday, after which a two-day Federal Open Market Committee meeting begins in the United States. In the short run, copper prices will take their cue from the Fed meeting and China’s upcoming Central Economic Work Conference, brokerage Jinrui Futures wrote in a note. But it cautioned: “The release of any macro good news will only bring about a short-term spike and won’t form a sustained rising market.” FUNDAMENTALS: * COPPER: The most-traded February copper contract on the Shanghai Futures Exchange ended the morning up 0.1 percent at 49,210 yuan ($7,134.06) a tonne. Three-month copper on the London Metal Exchange was flat at $6,134 a tonne as of 0512 GMT. * TRADE: China will temporarily suspend additional 25 percent tariffs on U.S.-made vehicles and auto parts starting Jan. 1, 2019, the finance ministry said on Friday, following a truce in a trade war between the world’s two largest economies. * VEDANTA: An Indian environment court set aside on Saturday the Tamil Nadu state government’s order to close Vedanta’s copper smelter plant permanently, taking the company closer to reopening its facility in southern India. * OTHER METALS: Shanghai nickel, the top performer, rose as much as 2 pct to 91,010 yuan a tonne, its highest since Dec. 6, tracking a similar jump in LME nickel on Friday, while Shanghai zinc added 1.2 percent. * USD: The dollar held near a 19-month high on Monday, bolstered by safe-haven buying as heightened concerns of a global economic slowdown reduced appetite for riskier assets such as stocks and Asian currencies.