METALS-Shanghai metals soften as traders focus on Sino-US trade talks

By Hongmei Li

SINGAPORE, July 28 (Reuters) - Shanghai metals lost ground on Monday after last week's gains, as traders looked forward to trade talks between the United States and China - the world's top two economies.

Shanghai Futures Exchange copper SCFcv1 eased 0.57% to 78,880 yuan ($11,004.62) a metric ton by 0102 GMT, lead SPBcv1 softened 0.44% to 16,835 yuan, zinc SZNcv1 dropped 0.66% to 22,695 yuan, aluminium SAFcv1 slipped 0.75% to 20,595 yuan, tin SSNcv1 fell 1.26% to 267,890 yuan, and nickel SNIcv1 declined 1.54% to 121,570 yuan.

The U.S. struck a framework trade agreement with the European Union on Sunday, imposing a 15% import tariff on most EU goods - half the threatened rate - and averting a bigger trade war between the two allies involving almost a third of global trade.

"The Chinese market is closely watching the trade talks between the U.S. and China, and any deals between the two will probably differ from Europe and Japan, and an extension of an August 12 deadline has been speculated on," said a Beijing-based metals analyst at a futures company.

Senior U.S. and Chinese negotiators will meet in Stockholm on Monday to tackle longstanding economic disputes at the centre of a trade war between the world's top two economies, aiming to extend a truce keeping sharply higher tariffs at bay.

Copper inventories in warehouses monitored by the SHFE CU-STX-SGH fell 13% week-on-week to 73,423 tons by July 25, hitting the lowest since December, which limited the price decline, according to the Beijing analyst.

Meanwhile, three-month lead on the London Metal Exchange CMPB3 inched up 0.12% to $2,016.5 per ton, zinc CMZN3 edged up 0.14% to $2,827.5, tin CMSN3 was up 0.2% at $34,130, and copper CMCU3 inched up 0.25% to $9,794, while nickel CMNI3 fell 0.49% to $15,245.

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