Copper edges lower despite strong Chinese trade data

LONDON: Copper prices slipped on Tuesday as strong trade data from China, the largest consumer, were offset by a stronger dollar and news that Johnson & Johnson paused clinical trials of a coronavirus vaccine.

Benchmark three-month copper on the London Metal Exchange (LME) was down 0.4pc at $6,711.50 a tonne at 1057 GMT but still close to September's 27-month high of $6,877.50.

Used in power and construction, copper has gained more than 50pc since March as China reopened its industry.

US stimulus, a weaker dollar or more faster growth outside China could lift prices further, but a resurgence in coronavirus cases could lower them, said Saxo Bank analyst Ole Hansen. "Probably we have reached as far as we can," he said.

CHINA TRADE: Chinese exports rose 9.9pc in September from a year earlier, in line with analysts' expectations and up from a 9.5pc increase in August. Imports jumped 13.2pc compared to a 2.1pc drop in August.

IMPORTS: China's copper imports rose in September to their second highest level on record. Imports in the first nine months of 2020 were up 41pc from a year earlier at 4.99 million tonnes.

"China's plan to build strategic reserves is likely to keep imports resilient," analysts at ANZ wrote in a note.

VACCINE: Johnson & Johnson paused clinical trials of a coronavirus vaccine candidate due to an unexplained illness in a study participant.

DOLLAR/YUAN: The dollar rose, making metals pricier for non-US buyers. China's yuan has weakened from an 18-month high on Friday but international banks say it is likely to strengthen again.

JAPAN: Japan's manufacturers are recovering at a glacial pace.

DUTIES: The European Union will impose duties of up to 48pc on imports of aluminium extrusions from China.

OTHER METALS: LME aluminium was down 0.2pc at $1,851.50 a tonne, zinc rose 0.4pc to $2,449.50, nickel gained 0.4pc to $15,225, lead fell 0.5pc to $1,835.50 and tin was 0.3pc higher at $18,295.