Copper inches higher ahead of G20 summit
LONDON — Copper rose for a fifth straight session on Monday, with hopes of a resolution to the US-China trade war outweighing the threat of higher US tariffs on Chinese goods.
Three-month copper on the London Metal Exchange (LME) ended 0.9% higher at $6,259 a ton, having gained 2.5% last week.
“Metals could benefit from a possible truce in the US-China trade war during the upcoming G20 summit,” said JP Morgan analyst Natasha Kaneva, adding that she considered spot contracts to be undervalued by about 10%.
US President Donald Trump last week said China was willing to take steps to resolve the prolonged US-China trade conflict, but Vice-President Mike Pence said on Saturday that the United States might double its tariffs unless Beijing bows to US demands.
Deep divisions on trade between Washington and Beijing were evident at the Asia-Pacific Economic Cooperation summit, with leaders on Sunday failing to agree on a communique for the first time in their history.
Headline inventories of copper in LME-registered warehouses fell by 9,400 tons to 151,625 tons, nearing last month’s 10-year low of 136,675 tons.
The premium for cash copper over the three-month contract rose to $21.50 a ton from $18.50 on Friday, pointing to a tighter market. It touched $47 on Oct. 26, its highest since January 2015.
The dollar slipped against other leading currencies after US Federal Reserve officials expressed caution over the global growth outlook, prompting traders to reassess the pace of future US interest rate increases.
Nickel fell 1.6% to close at $11,180 a ton, its lowest since Dec. 15 last year.
Nickel output in the Philippines, a major supplier, is expected to increase after the Environment department said that nine suspended mines will be allowed to resume operations if they rectify previous violations of environmental regulations.
Among other industrial metals, aluminum edged down 0.3% to $1,934 a ton, zinc lost 0.3% to $2,600, lead closed 0.2% up at $2,002 and tin rose 1.3% to $19,600.