METALS-Copper reaches multi-week highs on relief over tariffs

Updates prices at 1700 GMT

By Eric Onstad

LONDON, Feb 6 (Reuters) - Copper prices hit multi-week highs on Thursday as fears over a full-blown trade war eased despite threats by U.S. President Donald Trump.

Three-month copper CMCU3 on the London Metal Exchange (LME) was up 0.5% at $9,283.50 a metric ton by 1700 GMT after touching its highest since January 24 at $9,350.

The most active copper contract on the Shanghai Futures Exchange SCFcv1 gained 1.6% to 76,480 yuan ($10,500.73) a ton, its strongest since January 17.

"We're seeing bit of a relief rally. The worst expectations around tariffs coming in immediately have been allayed, even though we don't really have huge clarity yet," said Nitesh Shah, commodity strategist at WisdomTree.

Trump delayed imposing 25% tariffs on Canada and Mexico while top metals consumer China's retaliation to 10% levies imposed by Washington was relatively muted.

Trump's nominee for U.S. trade representative will argue in his Senate confirmation hearing on Thursday for a pragmatic U.S. trade policy focused on rebuilding U.S. manufacturing.

U.S. Comex copper futures HGc2 added 0.1% to $4.448 a lb, a premium of $553 over the LME price as investors seek to price in the impact of U.S. sanctions.

Traders were also seeing rays of hope in China's sluggish economy, Shah said.

"In China, what we're seeing isn't that bad, a continuation of that theme of a concerted effort of electrifying the economy. They've committed to massive amounts of spending on grid infrastructure," he said.

China's State Grid, which uses large amounts of metals, will invest a record of more than 650 billion yuan in the country's power grid this year, state-run media said last month.

SHFE reopened on Wednesday after the lunar new year holidays and investors are hoping China will unleash more stimulus at its National People's Congress meeting in March.

"Investors ... will be waiting for any sign of a rebound in demand following the holidays," said Daniel Hynes, senior commodity strategist at ANZ bank.

Among other metals, LME aluminium CMAL3 rose 0.3% to $2,623.50 a ton, zinc CMZN3 advanced 1.5% to $2,822.50, nickel CMNI3 gained 1.8% to $15,810, tin CMSN3 added 0.5% to $30,945, while lead CMPB3 dropped 0.7% to $1,988.50.

($1 = 7.2833 Chinese yuan)

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