Copper steady ahead of weekend US-China trade talks

LONDON: Copper held near five-week highs on Thursday after reports that the United States and China had struck a truce on trade ahead of a weekend meeting, though there was still uncertainty over the likelihood of a full deal being reached.

The South China Morning Post reported the truce on Thursday, ahead of the two-day meeting, raising hopes for an end to a trade conflict which has sapped metals demand.

Capital Economics senior commodities economist Ross Strachan cautioned there are "fundamental disagreements" between the two sides and that this was unlikely to be fully hashed out at the meeting in Japan.

"We are cautious on the likelihood of a deal this weekend, and how sustainable any deal would be as well," he said, adding that there was "some degree of nervousness to not over-read the signals".

Hopes for a resolution to the damaging tit-for-tat trade war had boosted prices for the metal used in power and construction on Wednesday to a five-week high of $6,063.50 a tonne.

Benchmark copper on the London Metal Exchange (LME) inched down 0.3% to $5,967.50 per tonne in official trading rings.

TRADE WAR: A Chinese commerce ministry spokesman said on Thursday that China opposes US abuse of export controls and urges the United States to return to a track of cooperation, days before the countries' leaders are set to meet for trade talks.

STRIKE: Unions at Chile's Chuquicamata mine have asked Codelco, the world's largest copper producer, to resubmit the offer their workers voted down last weekend, a union leader said, amid a nearly two-week strike that has docked output.

BALANCE: Global refined copper output showed a shortage of 32,000 tonnes in the first three months of the year compared with a 81,000 tonne surplus a year earlier.

CHINA PREMIUMS: Chinese Yangshan import premiums slipped for a second session to $57.50 per tonne over LME cash, still above last month's two-year low of $47.

CHINA INDUSTRIAL: Bolstered by improving sales and better margins, profits for China's industrial companies rose in May, bucking a months-long downtrend.

SCRAP: The port of Sanshan in southern China's Guangdong province stopped accepting scrap metal shipments on Thursday after an excessive build-up of stockpiles caused by importers racing to bring in cargoes ahead of new rules starting next week.

OTHER PRICES: Aluminium fell 0.9% to $1,804 per tonne, zinc eased 1.4% to $2,471, lead was bid 0.2% lower at $1,925 and tin was bid 0.2% higher at $18,825.

Nickel added 1.6% to a 10-week high of $12,690 a tonne.