Copper rides on reduced US-EU trade tensions
LONDON — Copper was set for its first weekly rise in seven weeks after a deal between the European Union (EU) and the United States reduced fears that new trade barriers would erode demand for metals.
Copper slumped from $7,348 a ton in June to a one-year low of $5,988 two weeks ago on concerns that a trade war would damage economies including that of China, the world’s largest consumer of metals.
But US President Donald Trump signaled a softer line this week with a deal with the EU to work toward eliminating trade barriers on industrial goods.
Benchmark copper on the London Metal Exchange (LME) closed up 0.1% at $6,297 a ton and was 2.4% higher last week.
The most traded contract on the Shanghai Futures Exchange also saw its first weekly gain in seven weeks, up 3.5%.
Most other industrial metals also rose last week from multimonth lows two weeks ago, but Mr. Trump’s unpredictability meant any recovery was fragile, Capital Economics analyst Caroline Bain said. “There’s so much uncertainty that it ( prices) could go either way,” she said. “We’re going to see more softness in the Chinese economy over the next few months which will prevent any significant rebound in metals prices for now.”
China was working to soften the impact of trade disputes with a plan to put more money into infrastructure projects and ease borrowing curbs on local governments, sources told Reuters.
Profit growth for China’s industrial firms slowed slightly in June from the previous month as factory production slowed.
Supporting copper prices was the threat of a strike at Escondida in Chile, the world’s largest copper mine, after its operator BHP made a final offer to workers with a wage rise that was less than unions demanded.
LME aluminum finished up 0.2% at $2,071 a ton and was 2% higher this week, its first weekly gain in eight weeks.
Data on Friday showed 37,375 tons of warrant cancellations, taking on-warrant stocks available to the market in LME-registered warehouses to 852,900 tons, the lowest since May 15 and pointing to tighter supplies. Underlining concerns of restricted supply, one entity held 50-79% of aluminum warrants on the LME, one entity controlled 5079% of copper warrants and one entity controlled 50-79% of zinc warrants.
Lead ended down 0.9% at $2,145 a ton, tin closed 0.4% higher at $19,925, nickel gained 0.6% to $13,860 and zinc finished 0.4% lower at $2,596. —