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METALS-Copper gains as Chile strike underlines supply deficit

Peter Hobson

(Updates throughout, moves dateline from SINGAPORE)

LONDON, June 25 (Reuters) - Copper prices rose on Tuesday as a strike at a major mine in Chile underlined a supply shortfall, although investors were on edge ahead of U.S.-China trade talks later this week.

Benchmark copper on the London Metal Exchange (LME) was up 0.7% at $6,004 a tonne at 1027 GMT after nearing last Thursday's high of $6,027.

But prices are still far from April's peak of $6,608.50, having been pushed lower by a deepening rift between Washington and Beijing that investors fear will weaken economic growth and metals demand.

"Fundamentally for copper things are starting to look more constructive," said ING analyst Warren Patterson.

"We have this strike in Chile. There are growing concerns that the copper concentrate balance is tightening. Refining charges in China have fallen, signaling a tightening in the market, and Chinese copper premiums have started to make a comeback."

TRADE WAR: U.S. President Donald Trump views this week's meeting with China's Xi Jinping as a chance to see where Beijing stands on the two countries' trade war, and is "comfortable with any outcome" from the talks, a senior U.S. official said.

DOLLAR: The dollar touched its weakest since March, helping dollar-priced metals by making them cheaper for buyers with other currencies.

STRIKE: Workers at Codelco's Chuquicamata copper mine in Chile rejected the company's latest offer over the weekend, having been on strike since mid-June.

DEFICIT: The global world refined copper market showed a 51,000 tonnes deficit in March after a 72,000 tonnes surplus in February, the International Copper Study Group (ICSG) said.

For the first 3 months of the year, the market was in a 32,000 tonnes deficit, the ICSG said.

CHINA PREMIUMS: Chinese Yangshan import premiums have risen to $59.50 from a two-year low of $47 last month. SMM-CUYP-CN>

STOCKS: Copper stockpiles in Shanghai Futures Exchange (ShFE) warehouses have fallen to 134,747 tonnes from more than 260,000 tonnes at the end of March. <CU-ALX-SGH>

Stocks in LME-registered warehouses, however, have climbed to 242,875 tonnes from a low of 111,125 tonnes in March. <MCUSTX-TOTAL>

LEAD: LME lead was down 0.1% at $1,911.50 a tonne as China's top producer Henan Yuguang Gold and Lead Co shut down one production line at a lead smelter in Jiyuan for a 30-day maintenance that will affect some 10,000 tonnes in output.

TIN: LME tin was down 0.1% at $19,050, with the premium for cash metal over the three-month contract diving to $20 from more than $200 earlier this month, pointing to more plentiful nearby supply. <MSN0-3>

OTHER METALS: LME aluminum was up 0.5% at $1,802 a tonne, zinc gained 1.2% to $2,522 and nickel rose 1.1% to $12,275.

(Reporting by Peter Hobson; Additional reporting by Mai Nguyen; editing by Alexander Smith)