Copper rises for a second week on US-China trade progress

Copper prices slipped on Friday but were still up for a second consecutive week after the United States and China said they had agreed a "phase one" trade deal but were hazy on details.

The agreement suspends and reduces some US tariffs on imports from China in return for Beijing purchasing US agricultural goods, but a lack of specifics left investors nonplussed.

Benchmark copper on the London Metal Exchange (LME) traded down 0.4% at $6,130 a tonne in closing rings after earlier reaching $6,216, the highest since May.

But the metal, used in used in power and construction, was still around 2.5% higher this week and up some 5.5% from lows on December 1.

"The market has been pricing in before the deal was announced," said Capital Economics analyst Kieran Clancy. "The reaction could be a sign that they are underwhelmed."

But he said a stabilisation in global manufacturing activity and relatively tight supply would likely push copper prices slightly higher through next year.

Investor sentiment was also boosted by a pledge from top officials in China, the biggest consumer of metals, to make economic policies more effective in 2020.

The yuan strengthened against the dollar, making dollar-priced metals cheaper for Chinese buyers.

Chinese stocks rallied sharply and global equities also gained, with an emphatic general election victory for Britain's Brexit-backing Conservative Party adding to the positive mood.

The economy faces another sluggish year despite a likely rebound in exports, the country's central bank said on Friday as it halved its growth forecast for 2020.

Headline inventories in LME-registered warehouses fell to 171,800 tonnes, the lowest since April 1.

The discount for cash aluminium versus the three-month contract expanded to $11.65 from a hefty premium at the start of the month, pointing to tighter nearby supply.

LME aluminium ended down 0.4% at $1,768 a tonne, zinc fell 0.4% to $2,253, lead slipped 1.4% to $1,910 and tin dropped 0.1% to $17,225. Nickel bucked the trend, rising 0.5% to $14,170. All were set for weekly gains except aluminium, which was roughly flat for the week.