LONDON: Copper edged higher on Monday, bouncing back from its third straight week of losses in a sign of market optimism over planned trade talks between China and the United States and a view that the recent decline in metals was overdone.
Benchmark copper on the London Metal Exchange (LME) ended 1.1 percent up at $5,991.50 a tonne, having hit a 14-month low last week as investors were spooked by a crash in the Turkish lira and the potential impact on metals of a US-China trade war.
"The rise today could be investors positioning ahead of the talks between China and the US They (investors) could be thinking it's a good sign and the risk of a full-blown trade war will be averted," said Capital Economics commodities economist Simona Gambarini, adding that last week's fall was overdone.
DOLLAR: A weaker dollar boosted demand for commodities.
SUPPLY: The union representing workers of Chilean copper mine Escondida signed a new collective labour contract on Friday, ending the risk of a strike that could have paralysed the world's biggest copper mine.
COPPER STOCKS: Inventories of copper in China, at 155,076 tonnes in warehouses monitored by the Shanghai Futures Exchange, have halved since a 2018 peak in March.
In LME warehouses, on-warrant stocks available to the market rose slightly to 223,200 tonnes.
CHINA CREDIT: China's banking and insurance regulator has asked financial institutions to give more support to infrastructure investment, importers, exporters and creditworthy companies experiencing temporary problems.
INVESTORS: Hedge funds and money managers trimmed their net short position in copper futures and options, data from the US commodities regulator showed on Friday.
ALUMINIUM: Global primary aluminium output rose to 5.472 million tonnes in July from a revised 5.334 million tonnes in June, data from the International Aluminium Institute showed on Monday.
OTHER METALS: Aluminium rose 1.2 percent to 2,055 a tonne, also helped by the prospect of trade talks. Zinc shed 0.5 percent to $2,377.50 while lead ended 0.8 percent down at $1,972.50, tin added 0.5 percent to $18,800 and nickel advanced by 0.5 percent to $13,560.
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