METALS-Zinc hits two-week low on worries about China-U.S. trade

By Kitco News / February 11, 2019 / www.kitco.com / Article Link


* No talks between Trump and Xi before March trade deadline
* Speculators target zinc after breached technical level


* GRAPHIC-2019 asset returns: (Updates with closing prices)By Eric OnstadLONDON, Feb 11 (Reuters) - Zinc slumped to a two-week low onMonday falling along with other industrial metals as speculatorssold in response to concerns about U.S.-China trade talks andglobal growth.China expressed anger on Monday at a U.S. Navy missionthrough the disputed South China Sea after U.S. President DonaldTrump said last week that he did not plan to meet with ChinesePresident Xi Jinping before a March 1 deadline for a trade deal. Chinese investors, returning after a week-long nationalholiday, seemed to focus more on downbeat news rather thanoptimism expressed by China on Monday about a new round of tradetalks with the United States."You had seen quite a run-up in base metals prices, withlots of positivity on the trade negotiations, and now thatballoon seems to have been punctured somewhat," said RossStrachan, senior commodities economist at Capital Economics inLondon."There seems to be more realisation that trying to get apermanent long-term deal between those two parties is extremelydifficult to imagine."Benchmark zinc on the London Metal Exchange had shotup by nearly a fifth in the month to Feb. 5, when it touched aseven-month peak of $2,810 a tonne.Since then, however, it has slipped 6 percent and was thebiggest LME decliner on Monday. It fell 2.2 percent in closingopen outcry activity to $2,644 a tonne, having earlier touched$2,631, the lowest since Jan. 25.

* ZINC STOCKS: Investors apparently brushed off news thatLME zinc inventories have eroded further to theirlowest since January 2008.
* ZINC TECHNICALS: Zinc attracted additional selling becauseof a weak chart picture, Marex Spectron's Matt France said in anote. "Zinc looks most vulnerable technically as it has breachedthe 200-day moving average at $2,660."


* COPPER: Three-month LME copper shed 1 percent tofinish at $6,150 a tonne after Chilean state miner Codelco saidon Saturday that it hoped to restart operations soon at itsChuquicamata copper mine.
* LEAD: LME lead gave up 1.7 percent to close at atwo-week low of $2,045.50 a tonne.A pullback in lead is expected to be short-lived, St?(C)phanieAymes, head of technical analysis at Societe Generale, said in anote. "Once a move beyond $2,132/35 takes shape, lead willextend the recovery towards $2,185 and perhaps even towards theMay 2018 trough at $2,241/28."
* DOLLAR: Also weighing on metals was a stronger dollar,making dollar-denominated metals more expensive for holders ofother currencies.
* PRICES: Aluminium closed unchanged at $1,880 atonne, nickel fell 0.6 percent to $12,490 and tin eased by 0.1 percent to $21,025.
* For the top stories in metals and other news, click or <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Enrico Dela Cruz in Manila and Muyu Xuin Beijing. Editing by Louise Heavens and David Goodman)

Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net)) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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