Copper slips on mixed Chinese data, tariff uncertainty

LONDON: Copper prices edged lower on Monday, as investors digested mixed factory data from top metals consumer China and progress in trade talks between Canada and the United States.

Three-month copper on the London Metal Exchange was down 0.4% at $9,840 a metric ton in official open-outcry trading, having hit its highest in three months on Friday.

“We had a pretty good week last week across financial markets, a lot of pro-risk effectively, and now we’re just consolidating those gains,” said Dan Smith, managing director at Commodity Market Analytics.

China’s manufacturing activity shrank for a third straight month in June, though at a slower pace than previous months, indicating stimulus measures were starting to have an impact.

“It’s proved to be pretty resilient despite all the trade wars, partly because the domestic economy is proving to be pretty robust,” Smith said.

The most traded copper contract on the Shanghai Futures Exchange added 0.2% to 79,870 yuan ($11,150.36) a ton.

Financial markets got a boost after Canada scrapped its digital services tax in a bid to advance stalled trade negotiations with the United States.

Copper prices poised for weekly gain on weaker dollar, tariff concerns

That gave investors hope that more trade deals will be hammered out, lifting uncertainty about tariffs imposed by U.S. President Donald Trump.

Metals markets also got support from a weaker U.S. currency, with the dollar index staying close to its more than three-year low hit last week.

A softer dollar makes commodities priced in the U.S. currency less expensive for buyers using other currencies.

U.S. Comex copper futures fell 0.8% to $5.08 a lb, bringing the premium of Comex over LME copper to $1,365 a ton, slightly weaker than Friday.

Among other metals, LME aluminium edged down 0.2% to $2,590.5 a ton in official activity and lead gained 0.2% to $2,047, while zinc fell 0.5% to $2,765.5, tin slipped 0.3% to $33,675 and nickel lost 0.2% to $15,220.