METALS-Copper prices edge up for second session as dollar retreats

 (Adds analyst comment, updates prices) By Manolo Serapio Jr MANILA, May 17 (Reuters) - London copper futures rose for a
second session on Thursday, spurred by a retreat in the U.S.
dollar from a five-month high against a basket of major
currencies. Three-month copper on the London Metal Exchange was
up 0.5 percent at $6,859 a tonne by 0404 GMT. ANZ analysts said in a note that the copper market appeared
to be tightening, with the front-end of the curve moving into
backwardation, when prices for future delivery are lower than
those for immediate dispatch. The one-day spread on tomorrow's contracts, or tom-next
spread, stood at $50 per tonne. "This appears to be creating a
short squeeze, with many traders forced to buy back short
positions," ANZ said. "If you look at the longer term, there's definitely a bull
case for copper," Argonaut Securities analyst Helen Lau said,
citing declining ore grades and rising cost, among other
factors. "But in the short-term, we still need to grapple with
slowing copper demand from China especially in the power
sector." FUNDAMENTALS * DOLLAR: The greenback was trading at 93.187 against a
group of major currencies, below Wednesday's peak of
93.632, its highest since Dec. 19, making dollar-denominated
assets cheaper for holders of other currencies. * SHANGHAI COPPER: The most-traded July copper contract on
the Shanghai Futures Exchange edged up 0.5 percent to
51,200 yuan ($8,052) a tonne. * CHINA DATA: Foreign direct investment into China in April
fell 1.1 percent year-on-year to 59.24 billion yuan ($9.31
billion), China's Ministry of Commerce said. * CHALCO: Aluminum Corp of China Ltd, or Chalco, plans to
export 30,000-50,000 tonnes of alumina in May, the company's
president said. * U.S.-CHINA: The United States and China launch trade talks
on Thursday in a bid to avert a damaging tariff war, with the
White House's harshest China critic relegated to a supporting
role, senior Trump administration officials said. * ASIAN SHARES: Asian equities held steady, while the euro
struggled near five-month lows set a day earlier following a
report that Italian populist parties trying to form a coalition
could ask the European Central Bank to forgive 250 billion euros
of debt. * HONG KONG EXCHANGE: The head of Hong Kong Exchanges and
Clearing said it would take time for the group to
develop its metals business on the Chinese mainland, including
plans to develop its commodity business in Qianhai in southern
China and start warehousing through its London Metal Exchange
operations. * LITHIUM: Australia's Kidman Resources said it
would supply lithium for Tesla Inc's electric car
batteries, the latest in a string of deals by carmakers securing
supplies of the mineral as demand surges for clean cars. * OTHER METALS: LME aluminium rose 0.7 percent to
$2,332 a tonne and nickel gained 0.5 percent to $14,545.
In Shanghai, aluminium climbed 1.1 percent to 14,905
yuan per tonne, while nickel added 0.6 percent to 108,060 yuan. BASE METALS PRICES 0404 GMT Three month LME copper 6859 Most active ShFE copper 51200 Three month LME aluminium 2332 Most active ShFE aluminium 14905 Three month LME zinc 3089 Most active ShFE zinc 23840 Three month LME lead 2349 Most active ShFE lead 19455 Three month LME nickel 14545 Most active ShFE nickel 108060 Three month LME tin 20815 Most active ShFE tin 146120 BASE METALS ARBITRAGE LME/SHFE COPPER LMESHFCUc3 364.09 LME/SHFE ALUMINIUM LMESHFALc3 -2345.06 LME/SHFE ZINC LMESHFZNc3 517.82 LME/SHFE LEAD LMESHFPBc3 507.44 LME/SHFE NICKEL LMESHFNIc3 -1687.98 ($1 = 6.3589 Chinese yuan) (Reporting by Manolo Serapio Jr.
Editing by Joseph Radford) 

JEFFREY LIPTON in BARBADOS – http://feeds.reuters.com/~r/reuters/companyNews/~3/6dsrUK7S56U/metals-copper-prices-edge-up-for-second-session-as-dollar-retreats-idUSL3N1SO1OS