LONDON, March 14 (Reuters) – Copper prices dropped on Thursday as industrial output in top metals consumer China fell to a 17-year low in the first two month of 2019, while LME stocks of the metal used in power and construction rose. Other Chinese data showed a mixed picture as the jobless rate climbed but property investment strengthened. Deutsche Bank metals strategist Nick Snowdon said the delivery of copper metal into LME warehouses “has been taken as a signal that we are seeing the softness we saw in China feed into ex-China market.” “China data also disappointed and pointed to relatively sluggish growth,” Snowdon said.
Benchmark copper on the London Metal Exchange shed 1.4 percent to a one-week low of $6,385 per tonne by 1144 GMT. U.S. President Donald Trump said he was in no rush to complete a trade agreement with China, with reports saying a U.S.-China meeting scheduled for later this month could be pushed back to at least April. Hopes for a resolution of the long-standing trade conflict have helped propel the LME index of six major base metals up nearly 9 percent so far this year. STOCKS: On-warrant stocks of copper, those not earmarked for delivery, in LME-approved warehouses jumped 34,900 tonnes to 66,325 tonnes. SPREADS: The premium of cash copper over the three-month LME contract eased to $20 a tonne from a discount of $70 last week, indicating worries over tight supply were easing. CHINA PREMIUMS: China’s Yangshan copper import premium rose to $59 from $52.5 registered a week ago, which was a level not seen since April 2017. CHINA STEEL: China’s daily steel output rose in January and February, as mills in the world’s top producer raised production amid firm steel margins and easier environmental restrictions. ZINC: Vedanta’s Skorpion zinc refinery in Namibia has suspended operations for five weeks due to lack of raw feed material, Fastmarkets MB reported. The refinery has a capacity of 100,000 tonnes annually. “This comes with available LME inventories in zinc extremely low, and while demand conditions remain subdued (as evidenced by low physical premiums), ongoing supply issues may see further aggressive backwardation in the coming weeks,” said BMO Capital Markets analyst Colin Hamilton.
ZINC STOCKS: Headline LME inventories of zinc fell 250 tonnes to 58,700 tonnes, their lowest since October 2007.
