Copper picks up on U.S. job data; trade talks in focus

• The U.S. unemployment rate dropped close to a 50-year low of 3.5pc in September, soothing some concerns sparked by disappointing manufacturing and services data.
• Copper prices firmed on Monday after strong U.S. jobs data eased fears of a possible recession in the world's largest economy and ahead of renewed efforts this week to resolve the U.S.-China trade conflict.

SINGAPORE: Copper prices firmed on Monday after strong U.S. jobs data eased fears of a possible recession in the world's largest economy and ahead of renewed efforts this week to resolve the U.S.-China trade conflict.

The U.S. unemployment rate dropped close to a 50-year low of 3.5pc in September, soothing some concerns sparked by disappointing manufacturing and services data.

Investor focus now shifts to the U.S.-China trade talks scheduled to resume over Oct. 10-11, with President Donald Trump saying that his administration had a "very good chance" of agreeing a trade deal.

However, Bloomberg reported that Chinese officials are signalling increasing reluctance to a broad trade deal pursued by Trump.

Three-month copper on the London Metal Exchange (LME) rose 0.4pc to $5,665.50 a tonne by 0739 GMT.

Copper prices have been caught between the balancing influences of falling supply and weakening global demand, especially in biggest user China.

The Shanghai Futures Exchange (ShFE) is due to re-open on Tuesday after a week-long public holiday in China. ShFE copper  was last traded at 47,110 yuan ($6,590.93).

"It's a matter of some faith that LME copper will not diverge from the last ShFE traded price during these twice-yearly week-long Chinese holidays," said John Browning, managing director of brokerage Bands Financial.

"If it does, trading folk law suggests LME copper will pull itself back into line before the ShFE reopens."

FUNDAMENTALS

PRICES: LME aluminium advanced 0.1pc to $1,720 a tonne, nickel was down 0.2pc at $17,750, zinc rose 0.9pc to $2,178.50 and tin edged up 0.4pc to $16,545.

CODELCO PREMIUM: The world's biggest copper miner, Codelco, has agreed its 2020 physical copper premium to European buyers at $98 a tonne, the same as for 2019, copper industry sources said on Friday.

TRADE TALKS: White House economic adviser Larry Kudlow said on Friday that the U.S. team was "open-minded" about the outcome of U.S.-China trade talks next week.

LEAD: LME lead rose as much as 1.1pc to $2,184.50 a tonne, its highest since July 2018, with the spread for cash lead over the three-month contract flipping to a premium of $2.50 a tonne after staying in discount territory for more than three weeks.

NICKEL: The three-month spread for nickel has been at a premium since mid-August and was last at $116 a tonne, indicating tight nearby supplies. LME nickel stocks dropped to 133,128 tonnes, their lowest since November 2012.