METALS-Shanghai copper dips as Grasberg mine-driven rally weighs on demand

(Updates prices by Asian market close) SHANGHAI, Sept 29 (Reuters) – Shanghai copper inched down on Monday, as a price rally driven by supply concerns following an accident at the world's second-largest mine weighed on demand. The most-traded copper contract on Shanghai Futures Exchange closed daytime trading 0.13% lower at 8,2390 yuan ($11,571.47) per metric ton, retreating from a six-month high hit last Thursday. Shanghai copper prices rose about 3.4% last week, largely driven by disruptions at the Grasberg mine in Indonesia. The Indonesian government has reached an agreement with Freeport Indonesia to halt operations at the mine to give priority to the search for trapped workers, the country's mining minister said on Friday. There's "not enough" acceptance for higher prices from downstream consumers, analysts at Chinese broker Galaxy Futures said. China published plans on Sunday for boosting the nonferrous metal industry, saying the industry should avoid constructing "repetitive and low-end" projects for metals including copper. The plan also called for adoption of high-end copper materials. Benchmark three-month copper on the London Metal Exchange was up 0.9% at $10,273 a ton, as of 0704 GMT. Among other SHFE base metals, lead declined the most, down 1.38% at 16,820 yuan a ton, while zinc dropped 1.18% to 21,755 yuan. Deficit in the global lead market narrowed in July to 5,600 tons from 19,100 tons in June, while zinc shifted to a surplus of 30,200 tons in July from a deficit in June, the International Lead and Zinc Study Group showed. Zinc stocks in SHFE sheds rose 1.2% week-on-week to 100,544 tons, making it the only base metal to post an increase, the exchange’s weekly stock report showed on Friday. Nickel dropped 0.66%, tin was down 0.45%, while aluminium dipped 0.1%. On the LME, aluminium was up 0.38%, zinc gained 0.38%, nickel gained 0.4%, lead declined 0.65% and tin dipped 0.14%. ($1 = 7.1201 Chinese yuan) (Reporting by Dylan Duan and Lewis Jackson; Editing by Subhranshu Sahu)

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