METALS-Copper nudges higher on Chinese economic support pledge

Updates with official prices

By Eric Onstad

LONDON, Jan 3 (Reuters) - Copper prices held in positive territory on Friday after China pledged more support for its ailing economy, though gains were capped by uncertainty surrounding the threat of U.S. tariffs on the world's biggest metal consumer.

Three-month copper CMCU3 on the London Metal Exchange (LME) added 0.1% to $8,811 a metric ton in official open-outcry trading, holding above the $8,757 five-month low touched on Tuesday.

China will sharply increase funding from ultra-long treasury bonds in 2025 to spur business investment and consumer-boosting initiatives, a state planning official said on Friday.

"The Chinese news is keeping our head above water, but we're facing an interesting year with the tariffs and the market trying to work out what kind of impact they may have on prices," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

U.S. President-elect Donald Trump has vowed to impose tariffs of 10% on global imports into America, along with a 60% tariff on Chinese goods.

The potential tariffs and disappointment about the level of stimulus Beijing has provided to boost flagging economic growth has weighed on copper prices, which have slid 13% since hitting a four-month peak of $10,158 on Sept. 30.

The most traded January copper contract on the Shanghai Futures Exchange SCFcv1 dropped 0.5% on Friday to 72,920 yuan ($9,989.31) a ton.

Most other LME metals were in the red after the dollar index .DXY jumped to a two-year high on Thursday, fuelled by expectations of only slow reductions to U.S. interest rates after a larger than expected drop in weekly jobless claims.

The dollar eased on Friday but was poised for its strongest weekly performance in more than a month.

A stronger U.S. currency makes it more expensive for holders of other currencies to buy dollar-priced commodities.

Among other metals, LME aluminium CMAl3 fell 1% in official activity to $2,504.50 a ton and zinc CMZN3 dropped 1.3% to $2,890, both having hit seven-week lows.

Nickel CMNI3 eased 0.6% to $14,985, its weakest since October 2020, while lead CMPB3 was 0.4% down at $1,927.50 after touching a five-month low and tin CMSN3 rose 0.9% to $28,825.

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($1 = 7.2998 Chinese yuan renminbi)

(Reporting by Eric Onstad
Editing by David Goodman)

((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net/))

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