London copper hovers at two-year low amid trade

Usama Fayyaz August 7, 2019

SINGAPORE: London copper prices on Wednesday struggled to break away from a two-year low as markets remained fragile with barely any signs of progress in the year-long trade negotiations between the United States and China.

US President Donald Trump pledged to stand with American farmers in the face of Chinese retaliation, after Beijing halted US farm purchases and raised the possibility of additional tariffs on US farm products in response to new tariffs.

London copper rose as much as 0.7pc in early Asian hours on hopes of further US-China trade negotiations, but retreated to gain only 0.1pc at $5,687.50 a tonne at 0721 GMT.

On Monday, prices of the metal used widely as a gauge of economic health hit $5,640 a tonne, its lowest since June 2017.

Meanwhile, Shanghai copper ended down 0.4pc to 45,960 yuan ($6,528.04) a tonne.

FUNDAMENTALS

TRADE TALKS: White House National Economic Council director Larry Kudlow told CNBC that the Trump administration was still planning to host a Chinese delegation for talks in September, while steps taken by Chinese authorities to contain a sliding yuan also helped calm fears of a full-blown trade and currency war.

CHINA POLL: China’s exports probably fell for a second successive month, while imports likely contracted more sharply in July, a Reuters poll showed, hurt by tit-for-tat tariffs in a rapidly escalating trade war with the United States.

LME: The London Metal Exchange is poised to extend its closing open-outcry trading sessions for all metals after volumes jumped in a three-month trial, denting expectations of an eventual move to full electronic trading.

GLENCORE/COBALT: Glencore Plc will halt production at Mutanda mine, the world’s largest cobalt mine, from the end of this year after a slump in prices for cobalt, Financial Times reported on Tuesday.

PRICES: London aluminium edged up 0.1pc, nickel dropped 1.3pc, while lead fell 0.4pc. In Shanghai, aluminium decreased 0.5pc, zinc dropped 1.9pc, while lead rose 0.5pc.

LEAD: “Both primary and secondary lead are in deficit, and smelters’ enthusiasm for production is not good, so supply may be reduced,” said a lead smelter.

Copyright Reuters, 2019

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