×

METALS-London copper edges down; China congress in focus

(Adds comment, detail, updates prices) MELBOURNE, Oct 18 (Reuters) - London copper on Wednesday eased from three-year highs hit earlier in the week, but was supported by solid demand-growth expectations, with markets looking to policy announcements from China's Communist Party Congress. "China's underlying demand for copper remains stable and solid," said Hong Kong-based broker Argonaut Securities. There has been stable demand from China's power sector, and strong demand from its auto and electronic sectors, which has offset a slight slowdown in construction, and weak demand from the home appliance sector, it said. More broadly, a pickup in global manufacturing has also brightened the demand outlook, said Argonaut analyst Helen Lau. "(A) synchronized PMI expansion, especially in the U.S., Europe and Japan points to a rosy demand recovery outlook, positive for copper demand."

FUNDAMENTALS

* LME COPPER: London Metal Exchange copper had slipped 0.2 percent to $7,016.50 by 0723 GMT, having pared earlier small gains and after giving up 1.5 percent in the previous session. It marked its strongest in more than three years at $7,177 on Monday.

* SHFE COPPER: Shanghai Futures Exchange copper slipped 0.9 percent to 54,890 yuan ($8,291) a tonne.

* CHINA CONGRESS: Chinese President Xi Jinping opened the critical Communist Party Congress on Wednesday with a pledge to build a "modern socialist country" for a "new era" that will be proudly Chinese, steadfastly ruled by the party but open to the world.

* CHINA ALUMINIUM: The Chinese government's campaign to reduce smog pollution and whittle down excess production is set to take around a tenth of its aluminium smelting capacity out of the market by the year-end, potentially adding fuel to a months-long price rally.

* ZINC, LEAD: In Shanghai, zinc fell 2 percent and lead slid 5 percent, tracking losses in ShFE rebar which fell 2.3 percent. Zinc stocks jumped by 16,250 tonnes after a large delivery order for tonnage from Antwerp was cancelled. <0#MZNSTX-LOC-GRD>

* LEAD: A lead trader in China said spot demand for lead has been weak, because of lower demand from battery makers. Some have cut back production and others stocked up in September. "But actually the fundamentals for lead are not that weak - it's seasonal."

* METALS DEMAND: Flush order books and solid output figures boosted morale among German investors in October, the ZEW research institute said on Tuesday, suggesting a strong phase of growth in Europe's biggest economy has further to run.

* PERU: More than 20 companies have expressed an interest in bidding on the $2 billion Peruvian copper project Michiquillay in an auction due to take place on Dec. 20, the Peruvian government said on Monday.

* RIO TINTO: The U.S. Securities and Exchange Commission (SEC) on Tuesday charged mining company Rio Tinto Plc, and two of its former top executives with fraud, saying they inflated the value of coal assets in Mozambique and concealed critical information while tapping the market for billions of dollars.

* For the top stories in metals and other news, click or

MARKETS NEWS

* Asian shares consolidated recent gains and currencies kept to tight ranges on Wednesday.

DATA/EVENTS

BASE METALS PRICES 0714 GMT Three month LME copper 7020.5 Most active ShFE copper 54890 Three month LME aluminium 2127 Most active ShFE 16080

aluminium

Three month LME zinc 3087 Most active ShFE zinc 25295 Three month LME lead 2484 Most active ShFE lead 19390 Three month LME nickel 11765 Most active ShFE nickel 94710 Three month LME tin 20390 Most active ShFE tin 145380

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 600.89 LME/SHFE ALUMINIUM LMESHFALc3 -311.05 LME/SHFE ZINC LMESHFZNc3 768.56 LME/SHFE LEAD LMESHFPBc3 -660.29 LME/SHFE NICKEL LMESHFNIc3 2299.59

($1 = 6.6207 Chinese yuan renminbi)

(Reporting by Melanie Burton; Editing by Amrutha Gayathri and Joseph Radford)