|16 September, 2019

Metals-Copper drifts lower on fragile China data, zinc gains

Zinc hits 1-1/2 month high after mine suspension

LONDON - Copper slipped on Monday after weak Chinese data fuelled worries about demand, but zinc hit a 1-1/2 month peak after a mine suspension.

China's industrial production grew at the weakest pace in 17-1/2 years last month and fixed-asset investment in January-August increased at a slightly lower rate than expected, data showed.

China is the biggest user of copper, which is used widely in power, construction and consumption.

"It was definitely weaker than expected. Copper has rallied pretty decently over the past couple weeks, but this was a little reminder that the underlying fundamentals are still questionable," said Colin Hamilton, director of commodities research at BMO Capital.

Chinese Premier Li Keqiang said it is "very difficult" for the world's second-largest economy to grow at a rate of 6% or more, after a 6.3% expansion in the first half of the year.

Three-month copper on the London Metal Exchange (LME) slipped 1.1% to $5,907.50 a tonne in official open-outcry trading after hitting a 1-1/2-month high in the previous session.

At its peak on Friday, copper had rebound 8% since touching a two-year low on Sept. 3.

* PEASQUITO MINE: Zinc hit a 1-1/2 month high of $2,404.50 a tonne after Newmont Goldcorp said on Sunday it had temporarily suspended operations at its Peasquito gold mine in Mexico due to an illegal blockade.

Zinc failed to trade in official LME activity and was bid up 0.3% at $2,390.

Peasquito was expected to produce 245 million lbs or 111,130 tonnes of zinc this year as a byproduct, the company said in a presentation this month.

* CHINA ALUMINIUM OUTPUT: LME aluminium was bid down 0.4% at $1,803 a tonne despite data showing that China's primary aluminium output in August fell 0.5% from the previous month as unexpected outages at two key smelters dented production.

"Everyone's been so scared that Chinese output is going to ramp up, but it hasn't," BMO's Hamilton said.

* ALUMINIUM STOCKS: LME inventories fell to 908,425 tonnes, the lowest since November 2007.

* CHINESE NPI: LME nickel slid 3.1% to trade at $17,205 a tonne in official rings after China's output of nickel pig iron (NPI) rose to a record of 53,200 tonnes of contained nickel in August, according to data from Shanghai Metals Market.

* PHILIPPINE NICKEL: A nickel mining hub in the southern Philippines has suspended extraction operations indefinitely as the regional government conducts an industry audit.

* PRICES: Lead was bid up 0.4% at $2,113.50 a tonne and tin was bid up 1.7% to $16,750.

(Reporting by Eric Onstad, editing by Louise Heavens) ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))

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