Wires

METALS-London copper slips from 8-month high as U.S. tariffs to remain

Mai Nguyen

(Updates prices) SINGAPORE, Jan 15 (Reuters) - London copper prices dropped from an eight-month high on Wednesday, snapping a seven-session winning streak after the United States said it would keep tariffs on Chinese goods, potentially dampening any boost to global growth. Washington and Beijing have been locked in an 18-month-long trade war with layers of tariffs slapped on each others' goods, hurting global economic growth and demand for industrial metals, especially copper. U.S. Treasury Secretary Steven Mnuchin said tariffs will remain after a Phase 1 trade deal signing later on Wednesday, but President Donald Trump could consider easing them if China moves quickly to seal a second agreement. Three-month copper on the London Metal Exchange (LME) was down 0.5% at $6,273 a tonne, as of 0708 GMT, while the most-traded copper contract on the Shanghai Futures Exchange

(ShFE) rose 0.2% to 49,260 yuan ($7,152.09) a tonne.

"(The deal) has already been reflected in the price, which will meet a resistance at $6,350 a tonne," said Fred Gu, a vice-president at Bayin Resources, adding that the Phase 2 deal needs a reduction or cancellation of U.S. tariffs or China's finance market opening up to push prices higher. "The physical market will slow down before the Lunar New Year and most end users will stop buying from next week until ... February," Gu said, referring to a week-long holiday in China starting Jan. 24.

FUNDAMENTALS

* CREDIT SUISSE: Credit Suisse said the U.S.-China Phase 1 deal would have minimal implications on global metals demand and the next phase of trade negotiations would likely remain volatile.

* COPPER: Global refined copper production edged higher in December but copper smelting activity in China hit new lows for the year in the second half of the month.

* STOCKS: Copper inventories in LME-approved warehouses <MCUSTX-TOTAL> fell to their 10-month low at 128,100 tonnes, giving some support to prices. However, copper stocks in China's Shanghai-bonded warehouses <SMM-CUR-BON> rebounded slightly in January to 265,000 tonnes, from a record low of 244,000 tonnes in December, Shanghai Metals Market monthly data showed.

* COPPER SPREAD: The discount of LME copper cash to the three-month contract <CMCU0-3> expanded to a three-month high at$32 a tonne, suggesting no nearby shortage of the metal.

* TSINGSHAN: China's nickel and stainless steel giant Tsingshan Holding Group produced 10.65 million tonnes of stainless steel and 330,000 tonnes of nickel equivalent in 2019.

* PRICES: LME aluminum dropped 0.5% to $1,800 atonne, nickel declined 0.2% to $13,845 a tonne, whileShFE nickel dropped 1.9% to 109,140 yuan a tonne.* For the top stories in metals and other news, click

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PRICES Three month LME copper Most active ShFE copper Three month LME aluminum Most active ShFE aluminum Three month LME zinc Most active ShFE zinc Three month LME lead Most active ShFE lead Three month LME nickel Most active ShFE nickel Three month LME tin Most active ShFE tin

ARBS

($1 = 6.8875 Chinese yuan renminbi)

(Reporting by Mai Nguyen; editing by Richard Pullin, Sherry Jacob-Phillips and Anil D'Silva)