News: RIO METALS-Copper prices up on supply concerns

• LME/SHFe arb: http://tmsnrt.rs/2oQ5nm2

(Updates throughout, moves dateline from Sydney)

Supply concerns helped copper higher on Friday but the metal was still on track for a third week of losses due to fund selling earlier in the week on fears political instability could hurt global growth.

Support for copper prices came from a series of supply issues, said Dee Perera at brokers Marex Spectron.

"You've got Rio Tinto production lower than expected in Q1, Freeport announced a potential strike, and today you had on-warrant stocks decline for a second session in a row," she said.

• LME COPPER: Three-month copper on the London Metal Exchange CMCU3 was up 0.2 percent at $5,633 a tonne in official outcry rings. On Wednesday, prices hit $5,530, the lowest since Jan. 4.
• STOCKS: On-warrant inventories at LME-registered warehouses MALSTX-TOTAL fell 9,025 tonnes to 150,950 tonnes. Stocks in warehouses monitored by the Shanghai Futures Exchange declined 11.5 percent to 240,191 tonnes from a week ago.
• RIO TINTO: Rio (RIO) on Thursday cut full-year copper production guidance to 500,000-550,000 tonnes from up to 665,000 tonnes due to a strike at the Escondida mine in Chile and output cuts at the Grasberg mine in Indonesia.
• FREEPORT STRIKE: Copper miner Freeport-McMoRan Inc warned it would punish workers for absenteeism at its Indonesian unit, a day after one of its main unions announced plans to go on a one-month strike over employment conditions.
• COPPER SUPPLY: The global refined copper market had a 51,000-tonne surplus in January, up from a 44,000-tonne surplus in January last year, the International Copper Study Group (ICSG) said. But the strike at the Escondida mine in February-March meant "next month's report should reflect a tighter market," analysts at ING said.
• ALUMINIUM OUTAGE: A power outage damaged over one-third of processing capacity at Vedanta's 500,000-tonne aluminium smelter in India, potentially causing 30,000 tonnes of lost production in the next three months.
• NICKEL SPREAD: The discount of LME cash nickel to the three-month contract CMNI0-3 shrank to $48 a tonne from $67.50 late last month, the largest since January 2015. A smaller discount indicates tighter supply.
• CHINA STEEL: Chinese iron ore futures and steel prices rallied on Friday after a recent selloff that had spilled over into other metals markets.
• OTHER METALS: LME aluminium CMAL3 was bid down 0.2 percent at $1,939 a tonne. Nickel CMNI3 was down 0.3 percent at $9,460. Zinc CMZN3 was down 1.1 percent at $2,604, tin CMSN3 was bid 0.1 percent higher at $20,869 per tonne and lead CMPB3 was down 0.9 percent at $2,140.

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