×

METALS-London copper hits near 3-month high as dollar falls

(Adds comment, detail, updates prices) MELBOURNE, June 29 (Reuters) - London copper punched through a key technical level on Thursday as falling supply and a weaker dollar lifted prices to their highest since April. The U.S. dollar index slid after hawkish comments by the Bank of England added to expectations the European Central Bank would raise rates. A weaker dollar encourages metals demand, making the dollar-priced commodity more affordable for buyers paying with other currencies. "The risk-on-tone saw the USD weaken, which supported investor appetite in base metals," ANZ said in a report. "This was followed up with data suggesting the markets are tightening up. Inventories across the sector continue to fall, while the appointment of a new environmental minister in China aroused fears of more capacity closures."

FUNDAMENTALS

* COPPER: London Metal Exchange copper had climbed 0.6 percent to $5,918 a tonne by 0518 GMT. Prices earlier marked their strongest since April 5 at $5,933.50 a tonne.

* CHARTS: Prices have broken through the 200-day moving average on their weekly chart, a key buy signal for chart-following funds, for the first time since February. The last time copper prices traded and held above this level was prior to March 2013.

* LME COPPER: LME copper stockpiles have fallen to just under 250,000 tonnes, the smallest since early March and down by nearly 100,000 tonnes since early May.

* SHFE COPPER: Shanghai Futures Exchange copper rallied 1 percent to 47,300 yuan ($6,977) a tonne. Prices broke back above the 100-day moving average for the first time since March.

* China on Tuesday appointed a new environment minister who has promised a "protracted battle" to clean up the nation's notoriously polluted air, water and soil.

* LEAD: LME lead also approached three-month highs as mine supply shrinks and China imports more metal.

* There is one party holding between 40-50 percent of LME lead stocks, <0#LME-WHL>, while there is a large short position of <0#LME-FBR> between 20-29 percent of outstanding futures positions in the July contract, LME data shows. This suggests there is a smaller pool of lead to deliver if the short holder wants to close their position and may be a factor driving up prices.

* NICKEL: A ban on open-pit mining in the Philippines enforced by a former environment minister has "no legal basis" and is under review, a senior government official said. A reversal of the ban could undermine nickel prices which remained up 0.3 percent up $9295 a tonne.

* COPPER: Mining companies operating in Chile are examining restarting projects that were put on hold in recent years due to a copper price slump, the mining minister and industry executives said, though final investment decisions will wait until political uncertainty lifts after the November presidential elections.

BASE METALS PRICES 0526 gmt Three month LME copper 5917.5 Most active ShFE copper 47300 Three month LME aluminum 1901 Most active ShFE aluminum 13970 Three month LME zinc 2752 Most active ShFE zinc 22660 Three month LME lead 2303.5 Most active ShFE lead 17770 Three month LME nickel 9295 Most active ShFE nickel 76350 Three month LME tin 19555 Most active ShFE tin 144600

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 511.23 LME/SHFE ALUMINIUM LMESHFALc3 -1025.

67

LME/SHFE ZINC LMESHFZNc3 397.68 LME/SHFE LEAD LMESHFPBc3 -1239.

45

LME/SHFE NICKEL LMESHFNIc3 1952.1

2

($1 = 6.7790 Chinese yuan renminbi)

(Reporting by Melanie Burton; Editing by Joseph Radford and Vyas Mohan)