LONDON: Copper prices moved higher on Friday on signs that the U.S. and China were moving closer to a solution to their fractious trade war.
Three-month copper on the London Metal Exchange gained 2% to $9,385.50 per metric ton by 0945 GMT after rising by nearly 1% in the previous session.
On Wednesday, copper slid more 3% in the wake of weak data from top metals consumer China and worries about U.S. tariffs dampening global growth.
Beijing is “evaluating” an offer from Washington to hold talks over U.S. President Donald Trump’s 145% tariffs, China’s Commerce Ministry said on Friday.
Trump said on Wednesday he believed there was a “very good chance” his administration could do a deal with China.
“The market is trying to build up a little optimism around those sound bites that we’ve seen from either side,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
London copper gains; firm dollar, soft US growth data cap rise
“This is basically people trying to speculate whether we’ve seen peak tariffs for now.”
The upside was probably limited, he added, with firm resistance at the 50-day moving average at $9,476.
Most active U.S. July Comex copper futures advanced 1.3% to $4.69 a lb, bringing the premium of Comex over LME to $967 a ton as traders make efforts to calculate the extent of potential U.S. tariffs on the metal.
Worries about the impact of tariffs on the economy were fuelled by data on Thursday that showed U.S. manufacturing contracted further in April, while tariffs on imported goods were straining supply chains.
“Unless there a smooth path towards a U.S.-China trade deal, which seems unlikely, volatility is likely to be a feature in industrial metals markets for a while,” said Kieran Tompkins at Capital Economics.
In other metals, LME aluminium added 0.9% to $2,438 a ton, zinc gained 1.6% to $2,617.50, lead rose 0.6% to $1,963, tin advanced 2.1% to $30,400 and nickel climbed up 0.9% to $15,395.
China’s financial markets are closed from May 1-5 for a public holiday. Trading will resume on Tuesday, May 6.
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