(Updates prices) By Peter Hobson LONDON, July 24 (Reuters) - A deepening U.S.-Chinaconfrontation put copper on track for its first weekly losssince mid-May, but analysts expect recovering demand and lowstocks to keep prices high.
Benchmark copper on the London Metal Exchange (LME)was 2% down at $6,413 a tonne at 1620 GMT on Friday for a weeklydecline of about 0.5%. However, prices remain close to atwo-year high of $6,633 hit on July 13.
Copper has rebounded from $4,371 in March as China, thebiggest consumer, controlled its coronavirus outbreak, reopenedindustry and launched infrastructure projects.
A rebound in demand outside China and the low level ofcopper stocks is likely to power further gains after acorrection lower, said BMO analyst Colin Hamilton.
"I'll be expecting copper higher at the end of the year. Weare playing the stimulus recovery."
CONFRONTATION: China ordered the United States to close itsconsulate in the city of Chengdu. U.S. Secretary of State MikePompeo called for "more creative and assertive ways" to pressthe Chinese Communist Party to change. MARKETS/DOLLAR: Global equities fell sharply and the dollarstabilised near its weakest in two years, helping metals bymaking them cheaper for non-U.S. buyers. ECONOMIC GROWTH: China's economy is expected to expand by2.2% this year, a poll showed, while German manufacturingstabilised, euro zone business activity bounced back to growthand U.S. business activity reached a six-month high in July. LME STOCKS: On-warrant copper stocks in LME-registeredwarehouses fell to 52,000 tonnes - a fifth of their level twomonths ago - after 5,100 tonnes of cancellations. ShFE STOCKS: Copper stocks in Shanghai Futures Exchangewarehouses fell by 963 tonnes to 157,684 tonnes in the week toFriday. SPREAD: The premium for cash copper over three-month metalon the LME rose as high as $28.50, compared with minus $30 inMay, pointing to a tighter market. OTHER METALS: LME aluminium was unchanged at $1,701a tonne, zinc fell 1.3% to $2,210.50, nickel slipped 1.2% to $13,640, lead lost 0.9% to $1,809.50 andtin was down 1.2% at $17,605. All remained up over theweek. (Reporting by Peter HobsonAdditional reporting by Mai NguyenEditing by Jane Merriman and David Goodman)
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