LONDON: Copper prices moved higher on Friday on signs that the US and China were moving closer to a solution to their fractious trade war. Three-month copper on the London Metal Exchange gained 1.6% to $9,357 per metric ton in official open-outcry trading after rising by nearly 1% in the previous session.
On Wednesday, copper slid more than 3% in the wake of weak data from top metals consumer China and worries about US tariffs dampening global growth. Beijing is “evaluating” an offer from Washington to hold talks over US President Donald Trump’s 145% tariffs, China’s Commerce Ministry said on Friday.
“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.
“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 of $9,476. Most active US July Comex copper futures advanced 0.8% to $4.66 a pound, bringing the premium of Comex over LME to $904 a ton as traders try to calculate the extent of potential US tariffs on the metal.
The expectation that Trump will impose tariffs on copper has resulted in a strong flow of metal to the US and tightened the physical copper market, analyst Amy Gower at Morgan Stanley said in a note.
“Bill of lading data suggests 200,000 tons of refined copper has landed in the US in the last five weeks, or 28% of total seaborne imports in 2024.”
Worries about the impact of tariffs on the economy were fuelled by data on Thursday that showed US manufacturing contracted further in April, while tariffs on imported goods were straining supply chains. “Unless there is a smooth path towards a US-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 0.3% to $2,423 a ton, zinc gained 1.4% to $2,614, lead rose 0.3% to $1,957, nickel climbed up 1.6% to $15,500 and tin jumped 4.1% to $30,995.
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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