Copper edges up, still ends week lower on trade war

LONDON — Copper turned positive on Friday as the dollar lost ground after weaker-than-expected US jobs data, but ended the week lower as trade tensions between the United States and China weighed.

US jobs growth slowed more than expected in July, likely due to firms’ struggles to find qualified workers, and the unemployment rate declined, pointing to tightening labor market conditions.

Gains in metals were kept in check after China’s Commerce Ministry said Beijing’s new set of proposed import tariffs on $60 billion worth of US goods were rational and restrained, warning it reserved the right of further countermeasures in the intensifying trade war.

London Metal Exchange copper ended 1.1% lower at $6,206 per ton, after falling as low as $6,074.50. It touched a two-week low of $6,066 on Thursday.

“The metals are being dragged down by the trade dispute and as long as this continues I don’t see any sustained movement higher,” said Commerzbank analyst Daniel Briesemann, adding that the commodities had been boosted by a dip in the dollar.

The dollar index weakened, boosting the price of dollar-denominated assets such as copper. The threat of a major supply stoppage lingered after the union at BHP Billiton’s Escondida mine in Chile, the world’s biggest copper mine, told the company on Thursday that it should improve its contract offer by Aug. 6 or it would begin preparations for a strike. Headline stocks in copper fell 825 tons to 250,625 tons. Headline stocks have shed 35% since late March to the lowest since Jan. 22.

China’s central bank said it would require banks to keep reserves equivalent to 20% of their clients’ foreign exchange forwards positions from Monday, in a move to stabilize the yuan.

China is considering measures to curb pollution in its smog prone Beijing-Tianjin-Hebei region and nearby areas during the upcoming winter season, including 30% production cuts on non-ferrous metal smelting, a draft plan showed on Thursday. The city of Chaoyang in China’s northeastern province of Liaoning says it had canceled a planned alumina project after a public consultation.

The US trade deficit recorded its biggest increase in more than one-and-a-half years in June as the boost to exports from soybean shipments faded and higher oil prices lifted the import bill.

Aluminum finished down 0.30% to $2,028 per ton, lead was unchanged at $2,115, tin was marginally lower at $19,600, zinc ended 2.7% higher at $2,631 while nickel fell 1.7% to $13,550. —