(Updates with closing prices) By Peter Hobson LONDON, Dec 18 (Reuters) - Copper prices dipped from theprevious session's 7-month high on Wednesday as data showingrecord Chinese production of the metal helped persuade investorsto pause for breath after a rapid rally.
Benchmark copper on the London Metal Exchange (LME)did not trade in closing rings, but was bid down 0.5% at $6,172a tonne after touching $6,223 on Tuesday, the highest since May8.
Copper, used in power and construction, had risen around 6%this month as a "phase one" U.S.-China trade deal and somebetter-than-expected data led to a less pessimistic reading ofthe global economic outlook. Behind that rally were investors abandoning bets that priceswill fall, said Macquarie analyst Marcus Garvey.
But now that investor positioning had become more neutral,it was unclear which way copper could move, with the outlook forboth trade negotiations and China's economy remaining uncertain, he said.
Macquarie forecasts copper will average $5,825 a tonne nextyear.
CHINA: As part of state efforts to stimulate growth in theworld's biggest consumer of metals, China's central bank loweredthe interest rate on 14-day reverse repurchase agreements instep with a similar cut in the 7-day repo rate last month. U.S./DOLLAR/FED: Strong economic data decreased the chancesof the Federal Reserve continuing to cut interest rates in 2020and strengthened the dollar, pressuring metals by making themmore expensive for buyers with other currencies. CHINA OUTPUT: China's refined copper output rose by 19.6%year-on-year to a record monthly high of 909,000 tonnes inNovember, official data showed. PREMIUMS: Chinese Yangshan copper import premiums fell to$61 from $85 in September, pointing to softer demand for metalfrom overseas. COPPER SPREAD: The discount for cash copper versus threemonth metal on the LME expanded to $29.25 from $6 two days ago,pointing to a better supplied nearby market. POSITIONING: Speculators' next long position in LME copperhad risen to 6.7% of active contracts by close of trading onFriday, brokers Marex Spectron said.
NICKEL: The global nickel market deficit declined to 52,200tonnes in the first ten months of the year from 134,200 tonnesin the same period of 2018, the International Nickel Study Group(INSG) said on Tuesday. OTHER METALS: LME nickel closed down 0.6% at $13,870a tonne, aluminium rose 0.7% to $1,777, zinc gained 0.9% to $2,301, lead added 2% to $1,926 and tin finished down 0.2% at $17,295.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Shanghai aluminium hits 3-month high on demand optimism ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Mai Nguyen in Singapore and Tom Dalyin Beijing; Editing by Steve Orlofsky, Elaine Hardcastle)
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