METALS-Copper rises as US-China trade tension fears ease

By Pratima Desai

LONDON, Oct 13 (Reuters) - Copper prices jumped on Monday as hopes of easing trade tensions between the U.S. and China and stronger Chinese imports of the industrial metal boosted sentiment, while momentum picked up after U.S. markets opened.

Benchmark copper CMCU3 on the London Metal Exchange was up 3.1% to $10,843 a metric ton by 1603 GMT after dropping more than 3% on Friday when President Donald Trump threatened sharply higher tariffs on Chinese imports.

Comex copper HGc3 jumped more than 5% to hit a session high of $5.165 a lb, or $11,387 a ton.

Expectations of copper shortages due to supply disruptions in Indonesia, Chile and the Democratic Republic of Congo, prospects of U.S. interest rate cuts and a weaker dollar helped propel prices to 16-month highs at $11,000 a ton last week.

Traders said optimism that Trump would scale back his tariffs rhetoric, as he has done before, and brighter prospects for demand in top consumer China were behind the higher copper prices.

China's copper imports rose 14.1% in September from the previous month to 485,000 tons while its export growth bounced back as the country has been diversifying its export markets this year away from the U.S.

Elsewhere, the focus is on zinc stocks in LME-registered warehouses, which at 37,475 tons are down 70% since the middle of July and at their lowest level since March 2023 MZNSTX-TOTAL.

Concern about zinc supplies on the LME market pushed up the premium for the cash contract over the three-month forward CMZN0-3 to three-year highs at $100 per ton. Three-month zinc CMZN3 rose 0.7% to $3,022.

Undermining the idea of tight supplies are rising stocks in warehouses monitored by the Shanghai Futures Exchange ZN-STX-SGH. At 106,950 tons, they have more than doubled since the middle of July.

In aluminium, traders said two companies 0#LME-WHL holding large amounts of warrants - title documents conferring ownership - are behind the cash contract over the three-month forward flipping into a premium from a discount earlier this month CMAL0-3.

Three-month aluminium CMAL3 added 0.6% to $2,765, lead CMPB3 slipped 1.7% to $1,987, tin CMSN3 ceded 1.3% to $35,705 a ton and nickel retreated 0.6% to $15,185 a ton.