Caution over US-China trade truce drags on copper
LONDON — Copper eased on Tuesday as markets awaited remedial action by the United States and China after the two countries’ weekend agreement on a 90-day ceasefire in their damaging trade dispute.
Other metals, however, clung on to the previous session’s gains, powered by a weaker dollar.
At the G20 summit last weekend, Washington and Beijing agreed to hold off from further tariffs for 90 days, pausing a dispute that had dragged down metals and equity markets. Markets remain skeptical, however, that full resolution will be achieved soon. “The G20 has always been long on rhetoric and short on substance, so now we need to see some instant action taking place,” said Societe Generale metals specialist Robin Bhar.
US President Donald Trump on Tuesday held out the possibility of an extension of the 90-day trade truce but made clear he would revert to tariffs if the two sides could not resolve their differences.
Three-month benchmark copper on the London Metal Exchange (LME) ended 1.4% down at $6,209 a ton, erasing the bulk of Monday’s 1.6% gain.
The US expects China to cut tariffs on US car imports and end intellectual property theft and forced technology transfers as the countries move towards a broader trade deal, a White House official said on Monday. “Initial G20 euphoria soon gave way to the realization that nothing has actually been resolved,” Brokerage Marex Spectron said in a note.
The premium for copper imports into China, the world’s biggest copper consumer, sank to an 18-month low on Monday in a sign that demand for physical metal is waning after a buying spree.
LME inventories of zinc touched their lowest since February 2008 at 111,750 tons, having halved since mid-August. The plunging stocks pushed the premium for cash LME zinc over the three-month price to more than $100 a ton, close to a 20-year high touched on Friday
Aluminum was flat at $1,974 a ton; zinc rose 0.2% to $2,589; lead was up 2.2% at $2,007; tin finished 1.6% up at $19,175; and nickel rose one percent to $11,140.