Copper advances on hints of progress in U.S.-China trade talks

Reuters September 13, 2019
  • Copper and some base metals rose on Friday as investors cheered signs of progress in resolving the U.S.-China trade conflict.
  • The prolonged trade war between the world’s two biggest economies has weighed on global growth and demand outlook for most industrial metals.
  • Three-month copper on the London Metal Exchange (LME)  rose 1.1% to $5,895.50 a tonne.

SINGAPORE: Copper and some base metals rose on Friday as investors cheered signs of progress in resolving the U.S.-China trade conflict, but the market was quiet due to a holiday in top consumer China.

China renewed purchases of U.S. farm goods, and U.S. President Donald Trump delayed a tariff increase on certain Chinese goods by two weeks, as the two sides made conciliatory gestures ahead of planned talks later in September and October.

Three-month copper on the London Metal Exchange (LME)  rose 1.1% to $5,895.50 a tonne by 0717 GMT, zinc advanced 0.9%, lead increased 1%, nickel was 0.6% higher, and aluminium dipped 0.4%.

The prolonged trade war between the world’s two biggest economies has weighed on global growth and demand outlook for most industrial metals.

U.S. President Donald Trump said on Thursday he preferred a comprehensive trade deal with China but did not rule out the possibility of an interim pact.

The Shanghai Futures Exchange was closed on Friday for the mid-autumn festival and will resume trading on Sept. 16.

FUNDAMENTALS

* COPPER: Fitch Solutions revised down its copper price forecasts due to poor investor sentiment and lower-than-expected Chinese demand.

* “We are now forecasting the copper market to be in surplus, rather than a deficit, during 2019-2021, prompting us to also revise down our 2020 and 2021 price forecasts,” Fitch Solutions said in a report released on Friday.

* NICKEL SPREAD: The premium of LME nickel cash to the three-month contract <MNI0-3> jumped to $163 a tonne from $102 a tonne in the previous session, signalling tight nearby supplies.

* NICKEL STOCKS: On-warrant nickel stocks in LME-approved warehouses <MNISTX-TOTAL>, or those available for delivery, tumbled to their lowest level in a decade at 77,628 tonnes, latest data showed.

* LME: London Metal Exchange’s plans to allow extended queues for loading out metal will enable warehouses in its network to boost their profits by holding metal for longer, but consumers will face higher costs as a result.

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