×

METALS-London copper holds above 2-week low on China optimism

(Adds comment, detail, and updates prices) MELBOURNE, March 5 (Reuters) - London copper turned flat on Monday as upbeat comments on China's economy at the annual opening to parliament underpinned prices, while aluminum and metals used in steel dropped on concerns over proposed U.S. trade tariffs. "We think base metals, in the absence of an escalating trade war, is likely to remain range-bound in March, with a slight downside bias," said analyst Ed Meir of INTL FC Stone. "The complex should start to strengthen late in Q2, when the impact of higher seasonal demand starts to get felt."

FUNDAMENTALS

* COPPER: London Metal Exchange copper traded flat at $6,895 a tonne by 0719 GMT, following losses of 0.4 percent in the previous session. Prices are expected to recover as manufacturing demand cranks up into the seasonally strongest second quarter. Prices hit $6,858.50 on Thursday, their weakest since Feb 13.

* SHFE COPPER: Shanghai Futures Exchange copper eased 0.5 percent to 51950 yuan ($8,204) a tonne on Monday.

* US TRADE TARIFFS: Ministers from the United States, Canada and Mexico meet on Monday to wrap up the latest round of NAFTA talks under the shadow of U.S. President Donald Trump's proposed steep tariffs on steel and aluminum imports.

* SHFE: Metals that could be hit by the U.S. trade tariffs slumped. Shfe aluminum and nickel slid around 1 percent, while and zinc dropped 2 percent. On the LME, aluminum and zinc fell half a percent and nickel dropped 0.8 percent.

* CHINA ECONOMY: China aims to expand its economy by around 6.5 percent this year, the same as in 2017, while pressing ahead with its campaign to reduce risks in the financial system, Premier Li Keqiang said Monday.

* ALUMINIUM: Some Chinese aluminum producers that shut smelters during a winter crackdown on pollution may not reopen this spring once output curbs are lifted, as planned new capacity by state-run companies threatens to overwhelm demand and cut into profits.

* CURVE: LME aluminum spreads showed easing in supply tightness mid-year when more China production is expected to come online, though nearby spreads from cash to March signaled severe supply stress. CMAL0-3> <CMALT-0>

* COPPER: Hedge funds and money managers cut their net long positions in COMEX gold and copper contracts in the week to Feb. 27, U.S. Commodity Futures Trading Commission data showed on Friday.

* DRC: Democratic Republic of Congo President Joseph Kabila will meet mining company representatives on Tuesday to discuss a mining code revision awaiting his signature that would raise taxes and royalties, the mines minister said.

* COMING UP: Euro zone Markit services PMI final Feb at 0900 GMT

BASE METALS PRICES 0710 GMT Three month LME copper 6900.5 Most active ShFE copper 51940 Three month LME aluminum 2140 Most active ShFE aluminum 14210 Three month LME zinc 3339.5 Most active ShFE zinc 25660 Three month LME lead 2443.5 Most active ShFE lead 18750 Three month LME nickel 13340 Most active ShFE nickel 101440 Three month LME tin 21585 Most active ShFE tin 147620 LME/SHFE COPPER LMESHFCUc3 1173.49 LME/SHFE ALUMINIUM LMESHFALc3 -1433.72 LME/SHFE ZINC LMESHFZNc3 608.96 LME/SHFE LEAD LMESHFPBc3 69.14 LME/SHFE NICKEL LMESHFNIc3 2150.28

($1 = 6.3325 Chinese yuan)

(Reporting by Melanie Burton; Editing by Richard Pullin and Sherry Jacob-Phillips)