METALS-Copper steadies on modest China stocks sale, firm dollar weighs

(Adds lead smelter suspension, official prices)

LONDON, July 21 (Reuters) – Copper prices recouped losses on Wednesday after China’s announcement of a second sale of state reserves with an amount that was less then expected, but a firmer dollar still weighed on the market.

Three-month copper on the London Metal Exchange slipped 0.4% to $9,303 a tonne in official trading after earlier falling to a low of $9,260.50.

Copper has eased from a record peak of $10,747.50 in May, but is still up 20% so far this year.

China will sell 30,000 tonnes of copper and other base metals on July 29 as Beijing aims to rein in skyrocketing commodity prices, a government body said.

“There were rumours in the market that there would be a high number, but the announcement was lower than expectations,” said Wenyu Yao, senior commodities strategist at ING Bank.

“It’s quite a mixed picture this morning and copper has really been macro driven recently,” she added, referring to fears about rising COVID-19 cases and higher inflation.

* German lead producer Berzelius Stolberg has stopped production at its plant in Stolberg in western Germany after floods hit the area last week.

LME lead was little changed at $2,327 a tonne.

* The premium of LME cash lead over the three-month contract CMPB0-3 hit a near three-week high of $13.25 a tonne, indicating tightening nearby supply. LME inventories MPBSTX-TOTAL fell to a one-year low of 64,425 tonnes.

* The dollar index rose to its highest since early April, making metals priced in the U.S. currency more expensive to holders of other currencies.

* The Yangshan copper premium SMM-CUYP-CN rose to $40 a tonne, its highest since May 7, indicating strengthening demand for imported metal into China.

* The global nickel market deficit widened to 21,300 tonnes in May compared a shortfall of 20,400 tonnes in April, data showed.

* LME aluminium shed 0.7% to $2,449 a tonne, zinc dropped 0.7% to $2,942.50, nickel lost 1.6% to $18,386 and tin gave up 0.6% to $33,290.

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