METALS-Copper prices edge higher as US-China trade optimism lingers

SHANGHAI, Oct 28 (Reuters) - Copper prices edged higher on Tuesday, lifted by optimism over a potential U.S.-China trade deal, with a meeting between the two presidents just around the corner boosting market sentiment.

The most-active copper contract on the Shanghai Futures Exchange SCFcv1 was up 0.18% at 88,100 yuan ($12,368.38) per metric ton, as of 0250 GMT.

The benchmark three-month copper CMCU3 on the London Metal Exchange was flat at $11,030.50 a ton.

Both the Shanghai and London contracts extended gains from the previous session and hovered near 17-month highs.

Officials from the U.S. and China hashed out a framework on trade to deescalate recent tensions over the weekend for President Donald Trump and his Chinese counterpart Xi Jinping to decide on later this week at their meeting in South Korea.

Bullishness in copper came as investors' confidence are high for Trump to sign that trade deal with China, buying in a de-escalation of this round of trade tensions.

Meanwhile, Chinese yuan CNY=PBOC continued to strengthen against the U.S. dollar. Making commodities priced with the greenback cheaper for Chinese buyers.

Elsewhere among SHFE base metals, nickel SNIcv1 posted the biggest loss, down by nearly 1% to trade at 121,170 yuan a ton. Nickel posted gains for three consecutive sessions before retreating early in the day. But oversupply continued to haunt the battery metal, nipping any upward momentum, traders said.

"There is just too much nickel out there. So, whenever nickel gained, it seems a good chance to cash out as no one knows if the gains could continue," a nickel trader said, requesting anonymity as the person's not authorized to speak to the media.

Deliverable nickel stocks in SHFE's sheds registered a third consecutive weekly gain, up 4.81% week-on-week to 36,075 tons, according to the exchange's weekly stock report.

Zinc SZNcv1 gained 0.27%, while lead SPBcv1 declined 0.60%. Aluminium SAFcv1 and tin SSNcv1 traded near the flatline.

Among other LME metals, aluminium CMAL3 nudged 0.14% higher, zinc CMZN3 dropped 0.15%, lead CMPB3 and nickel CMNI3 nudged 0.10% downwards, and tin CMSN3 was little changed.

Tuesday, October 28

DATA/EVENTS (GMT)

1100 France Unemp Class-A SA September

1400 US Consumer Confidence October

($1 = 7.1230 Chinese yuan)