Copper jumps after report on resilient China economy

LONDON — Copper edged up on Monday on expectations of higher demand from top consumer China after a report showed a resilient economy despite a modest monthly decline in manufacturing activity.

Benchmark copper closed at $6,807 per ton, up 0.20%, edging off a two-week low hit on Friday. The metal shed 2.4% on Friday in its worst performance since early February.

Growth in China’s vast manufacturing sector eased only slightly in April in a sign of broad economic resilience, though slowing export orders pointed to risks to the outlook amid a simmering Sino-US trade row.

It marked the 21st straight month of expanding business conditions in China.

“The Chinese data is probably main catalyst for the rise (in copper),” said ETF Securities analyst Nitesh Shah.

“But there is also a dose of volatility in metals, with the uncertainty surrounding steel and aluminum about whether there will be exemptions for European countries.”

The United States imposed import tariffs of 25% on steel and 10% on aluminum in March, but it provided a temporary exemption until May 1 for the EU. President Donald Trump will decide then whether to make the exemption permanent.

COPPER: Chile’s Escondida, the world’s largest copper mine, said on Thursday early contract talks with its workers’ union ended without an agreement, setting the stage for legally scheduled negotiations to begin in June.

DOLLAR: The dollar index rose 0.30% to near three-month highs, capping gains in the copper market.

ALUMINUM STOCKS: Total stocks of aluminum in LME-approved warehouses fell 8,575 tons to 1.3 million tons. About 69% of that is available to the market.

ALUMINUM POLL: Aluminum market deficits are set to deepen, but the market is likely to rebalance once the dust settles after US sanctions on Russian producer Rusal, leaving prices little changed, a Reuters poll showed.

PRICES: Aluminum ended 1.1% higher at $2,250 per ton, after clocking up its worst week since November 2008, down 10%.

The price of metal used in aeroplane parts and beer kegs has been erratic since the US imposed sanctions on a major shareholder of the world’s second-biggest aluminum producer, Russia’s Rusal.

RUSAL: Rusal will overhaul its board and management in the hope of persuading the US to lift sanctions, but it may be forced to suspend aluminum exports for good if the plan fails, sources close to the company said.

PRICES: Benchmark lead fell 1.1% to $ 2,320, tin added 1.3% to $21,175, zinc added 0.20% to $3,127 and nickel slipped 1.5% to $13,670. —