LONDON: Copper and other base metals in London were on track to finish a very volatile week with a daily growth on Friday supported by a weaker dollar, although risks for demand due to trade conflict between the U.S. and top metals consumer China capped gains.
The benchmark three-month copper on the London Metal Exchange (LME) was up 1.7% at $9,135.50 per metric ton by 1032 GMT.
The metal, used in power and construction, is up 4% so far this week, which saw it hitting a multi-month low of $8,105 a ton on Monday as trade conflict between the world’s two largest economies fuelled global recession fears.
Beijing on Friday increased its tariffs on U.S. imports to 125%, hitting back against U.S. President Donald Trump’s decision to hike duties on Chinese goods to 145% and raising the stakes in a trade war that threatens to up-end global supply chains.
However, consumer buying and temporary technical factors helped metals to get a pause from these risks.
“The market is seeing some mean reversion having gotten stretched to the downside on a technical basis into a consumer and arbitrage bid across the majority. The most significant positions left in market likely some of the faster model shorts,” said Alastair Munro, senior base metals strategist at broker Marex.
Copper, aluminium edge up after sharp sell-off
Discounts for nearby LME copper contract against those further along the maturity swung into premiums or backwardation ahead of next week’s LME contracts settlement.
The spread between the cash LME copper contract and benchmark three-month futures was last at a premium of $26 per ton compared with a discount of $63 a week ago.
On the demand side, Chilean copper giant Codelco said on Thursday that it was seeing strong demand for the metal from China this quarter.
Supporting this view, the Yangshan copper premium, which reflects demand for copper imported into China, remained this week at $87 a ton, its strongest since late 2023.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 19% this week.
LME aluminium gained 1.7% to $2,410 a ton, zinc rose 1.0% to $2,666, lead added 0.9% to $1,907.50, tin climbed 1.9% to $31,230 and nickel jumped 3.2% to $15,265.
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