(Updates prices) By Peter Hobson LONDON, Oct 12 (Reuters) - Copper touched a three-week highon Monday as demand from top consumer China and the threat ofstrikes by miners in Chile pushed prices closer to 27-monthhighs reached in September, though a strengthening yuan limitedgains.
Benchmark three-month copper on the London MetalExchange (LME) was down 0.2% at $6,748 a tonne at 1600 GMT aftergoing as high as $6,785.25.
The metal used in power and construction hit $6,877.50 onSept. 21 - up 57% since hitting its lowest this year in March -as Chinese industry reopened and speculators bought into therally.
Strong Chinese consumption is now priced in and gains arelikely to slow, said Capital Economics analyst Kieran Clancy,warning that new coronavirus outbreaks could derail demand.
"We are going to enter a more gradual, steady climbupwards," he said.
CHINA STIMULUS: China will invest close to $900 billion overthe next five years to develop the country's copper-intensivepower grids, state media reported. CHINA EXPORTS: China's exports are likely to have achieved afourth straight month of gains in September, a poll showed. CHINA OUTPUT: Copper cathode production by Chinese smeltersin September were up 3% from August, with output over the firstnine months of the year down 1.6% year on year at 6.26 milliontonnes, researchers Antaike said. YUAN: The yuan fell from an 18-month high against the dollarafter China's central bank lowered reserve requirements for someforeign exchange trading. A weaker yuan makes metals moreexpensive for Chinese buyers. PREMIUMS: Chinese Yangshan copper premiums rose to $53.50 atonne, the highest since Sept. 23 but still far below the 2020peak of $113.50. MARKETS: U.S. stocks climbed strongly. CHILE: The union at Chile's Escondida mine rejected BHP's final offer in contract negotiations, but the minersaid it would meet the union again in an effort to avoid strikeaction. POSITIONING: Speculators on the Comex exchange cut their netlong position to 69,806 contracts from 87,308 contracts in lateSeptember. COLUMN: Speculators' commitment to copper's bull narrativeseems largely unshaken, writes Andy Home. OTHER METALS: LME aluminium was up 0.6% at $1,853 atonne, zinc rose 0.5% to $2,445, nickel fell0.4% to $15,165, lead added 1.6% to $1,836.50 and tin was 0.2% down at $18,240. (Reporting by Peter HobsonAdditional reporting by Mai NguyenEditing by Ed Osmond and David Goodman)
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