Copper climbs off 2-week lows on China optimism
MELBOURNE — London copper edged up on Monday as upbeat comments on China’s economy at the annual opening to parliament underpinned prices, while aluminum and metals used in steel fell on concerns over proposed US trade tariffs.
“We think base metals, in the absence of an escalating trade ware, will likely remain rangebound in March, with a slight downside bias,” said analyst Ed Meir of INTL FC Stone. “The complex should start to strengthen late in Q2, when the impact of higher seasonal demand starts to get felt.”
London Metal Exchange (LME) copper edged down 0.30% to $6,917.50 a ton by 0717 GMT, following losses of 0.40% on Friday. Prices are expected to recover as manufacturing demand cranks up into the seasonally strongest second quarter. Prices hit $ 6,858.50 on Thursday, the weakest since Feb 13.
Shanghai Futures Exchange ( SHFE) copper eased 0.40% to 52,040 yuan ($ 8,220) a ton on Monday.
Ministers from the US, Canada and Mexico were to meet Monday to wrap up the latest round of North America Free Trade Agreement talks under the shadow of US President Donald Trump’s proposed steep tariffs on steel and aluminium imports.
Metals that could be hit by tariffs, including SHFE aluminum and steel inputs zinc and nickel fell by around 1%.
China aims to expand its economy by around 6.5% this year, the same as in 2017, while pressing ahead with its campaign to reduce risks in the financial system, Premier Li Keqiang said Monday.
Some Chinese aluminum producers that shut smelters during a winter crackdown on pollution may not reopen this spring once output curbs are lifted, as planned new capacity by state-run companies threatens to overwhelm demand and cut into profits.
LME aluminum spreads showed easing in supply tightness midyear when more China production is expected to come online, though nearby spreads from cash to March signaled severe supply stress.
Hedge funds and money managers cut their net long positions in COMEX gold and copper contracts in the week to Feb. 27, US Commodity Futures Trading Commission data showed on Friday.
Democratic Republic of Congo President Joseph Kabila will meet mining company representatives on Tuesday to discuss a mining code revision awaiting his signature that would raise taxes and royalties, the mines minister said. —