LONDON: Copper prices held firm on Monday ahead of the resumption of talks between top US and Chinese officials on trade and key economic data from the world’s two largest economies later this week. Benchmark copper on the London Metal Exchange (LME) traded 0.6% higher $9,830 a metric ton in official rings.
Prices of the metal widely used in the power and construction industries have come under pressure this year due to worries about damage to demand in top consumer China from the trade war between the two countries.
China faces an August 12 deadline to reach a tariff agreement with US President Donald Trump’s administration, after reaching preliminary deals in May and June to end weeks of escalating tit-for-tat tariffs. However, traders said industrial metals markets this week were more likely to be led by macro-economic factors such as a meeting of Federal Reserve policy makers and data from industrial sectors in the United States and China.
“Manufacturing PMIs are important. China not only consumes, it also exports large amounts of goods,” a copper trader said, referring to purchasing managers data, and adding that Chinese shipments were an important indicator of the health of the global economy.
Focus is also on US plans to impose 50% tariffs from Friday on copper imports, which last week drove Comex prices to all-time highs of $5.9585 cents per lb or $13,136 a ton.
Record high Comex prices have attracted copper to the United States, much of it from LME-registered warehouses around the world, creating worries about availability of the metal in the LME system.
But with the tariffs imminent, that fear is passing and can be seen in the large discount for the LME’s cash copper contract against the three-month forward at around $51 a ton compared with a premium above $300 a ton only a month ago. Overall, the higher US currency making dollar-priced metals more expensive for holders of other currencies was weighing on prices.
Aluminium slipped 0.1% to $2,631.5 a ton, zinc ceded 0.2% to $2,817.5, lead gained 0.6% $2,029, tin was down 0.6% at $33,975 and nickel retreated 0.2% to $15,230.
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