BEIJING, Oct 26 (Reuters) - London copper prices retreated
by more than 1 percent on Friday, wiping out Thursday's gains
from a sharp drop in inventories, as concerns over the impact of
a U.S.-China trade row on demand for industrial metals returned
to focus.
The metal had risen 0.8 percent in the previous session
after on-warrant LME inventories - those not earmarked for
delivery - slid to their lowest since December 2005.
"Cancelled warrants and orders to remove inventories from
LME warehouse have climbed 20 percent in the past two days," ANZ
said in a note on Friday.
Despite falling stocks, London copper is down 1 percent for
the week, after shedding 1.3 percent in the week ended Oct. 19,
while open interest in Shanghai copper has fallen to its lowest
since February 2017.
"Demand is not very good, stocks are rising and the market
does not have confidence at this time," despite a pledge of
support from the Chinese government, a broker said.
FUNDAMENTALS
* LME COPPER: Three-month copper on the London Metal
Exchange fell 1.2 percent to $6,154 a tonne by 0451 GMT.
* SHFE COPPER: The most-traded December copper contract on
the Shanghai Futures Exchange rose as much as 1.3
percent before trimming gains to 0.4 percent by the end of the
morning, when it stood at 49,950 yuan ($7,176.52) a tonne.
* OPEN INTEREST: Market open interest on Shanghai copper
fell to 495.476 lots on Thursday, the lowest since Feb. 9, 2017,
in a sign that money is leaving the market.
* OTHER METALS: The rest of the base metals complex was
lower, with ShFE nickel slipping 1 percent. Shanghai
lead was the only other metal to buck the trend,
gaining 1 percent on falling stocks.
* VALE: Brazil's Vale, the world's top iron ore
producer, is expecting major improvement in the performance of
its base metals division in 2020 but said that production cuts
would remain in effect this year and next while prices remain
low, executives said on Thursday.
