METALS-Copper holds firm, focus on US-China trade talks

By Pratima Desai

LONDON, July 28 (Reuters) - Copper prices held firm on Monday ahead of the resumption of talks between top U.S. and Chinese officials on trade and key economic data from the world's two largest economies later this week.

Benchmark copper CMCU3 on the London Metal Exchange (LME) was up 0.2% at $9,791 a metric ton at 1606 GMT.

Prices of the metal widely used in the power and construction industries have come under pressure this year due to worries about damage to demand in top consumer China from the trade war between the two countries.

China faces an August 12 deadline to reach a tariff agreement with U.S. President Donald Trump's administration, after reaching preliminary deals in May and June to end weeks of escalating tit-for-tat tariffs.

However, traders said industrial metals markets this week were more likely to be led by macroeconomic factors such as a meeting of Federal Reserve policy makers and data from industrial sectors in the United States and China.

"Manufacturing PMIs are important. China not only consumes, it also exports large amounts of goods," a copper trader said, referring to purchasing managers' data, and adding that Chinese shipments were an important indicator of the health of the global economy.

Focus is also on U.S. plans to impose 50% tariffs from Friday on copper imports, which last week drove Comex prices HGc3 to all-time highs of $5.9585 per lb or $13,136 a ton.

Record high Comex prices have attracted copper to the United States, much of it from LME-registered warehouses around the world MCUSTX-TOTAL, creating worries about availability of the metal in the LME system.

But with the tariffs imminent, that fear is passing and can be seen in the large discount for the LME's cash copper contract against the three-month forward MCU0-3 at around $51 a ton compared with a premium above $300 a ton only a month ago.

Overall, the higher U.S. currency making dollar-priced metals more expensive for holders of other currencies was weighing on prices.

Aluminium CMAL3 slipped 0.1% to $2,631 a ton, zinc CMZN3 fell 0.4% to $2,812, lead CMPB3 gained 0.3% to $2,020, tin CMSN3 was down 1.1% at $33,690 and nickel CMNI3 retreated 0.3% to $15,275.

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