Copper leads metals rally on Sino-US trade outlook

LONDON — Copper hit its highest in nearly two weeks on Friday, lifted by signs that tensions between the United States and China were easing after their presidents expressed optimism about resolving the long-standing tit-for-tat tariff row.

Copper, used in power and construction, has been weighed down this year by fears that the tensions between the world’s top economies will curb demand for industrial metals.

Buying in the metals market gained further momentum after data showed US job growth rebounded sharply in October and wages recorded their largest annual gain in nine and a half years.

Benchmark copper closed open outcry trading 3.2% up at $6,283 a ton, having peaked at $6,304.50, its highest since Oct. 22. The percentage rise was the biggest one-day gain in six weeks.

Having advanced by 1.6% in the previous session, declines at the start of the week were turned around for a weekly gain of nearly two percent.

US President Donald Trump said on Twitter that trade discussions with China were “moving along nicely” and that he planned to meet President Xi Jinping on the sidelines of a G20 summit in Argentina after the two had a “very good” phone discussion.

“For copper it’s win-win from a lot of sides here; the better risk sentiment in markets, the dollar has dropped back down and now there is a better outlook for a trade deal,” said Danske Bank commodities analyst Jens Pedersen. He warned that there could be volatility in metals markets ahead of a final deal being signed.

“Signs of a trade deal should lift prices somewhat, but upside should be limited in our view as the metal markets remain well supplied overall,” said Julius Baer analyst Carsten Menke.

Metals held its gains despite the US currency erasing losses after buoyant US data and moving into positive territory. A weaker greenback makes dollar-denominated commodities cheaper for non-US firms — a relationship used by funds to generate buy and sell signals.

On-warrant copper stocks in LME-approved warehouses jumped 78%, or 44,950 tons, to 102,600 tons. The premium for cash copper over the threemonth LME contract narrowed to $8 from the $47 touched recently, which was its highest in more than three years.

Aluminum finished 0.4% firmer at $1,973 a ton; zinc was bid up 0.5% to $2,552; lead climbed 1.9% to end $1,990; tin was unchanged at $19,100; and nickel closed 1.2% up at $11,930. —