Trade turf threatens copper’s stability

COPPER PRICES STEADIED near 14- month lows on Friday but were set for their second consecutive weekly loss as investors braced for new U. S. tariffs on China which could damage economic growth and demand for metals.

China has warned it would retaliate if they are applied. But anxiety over the tariffs have been hitting copper despite positive supply and demand fundamentals, according to Robin Bhar, Societe Generale analyst.

“Everyone is waiting for the tariffs to be applied or not. Rebounds in metals prices will simply not get going while you have these macro fears,” he said.

Benchmark copper on the London Metal Exchange closed up 0.1 percent at $5,933 a tonne but down 0.7 percent this week and near its August low of $5,773.

The U.S.-China trade con- flict has helped push copper prices down some 20 percent since early June.

China accounts for nearly half of global copper demand estimated at around 24 million tonnes this year.

On-warrant stocks of copper available to the market in LME-registered warehouses rose by 850 tonnes to 147,450 tonnes but are still down from more than 234,000 tonnes in mid-August, signaling a tighter market.

Stockpiles in Shanghai Futures Exchange (ShFE) warehouses fell to 136,051 tonnes from more than 300,000 tonnes in April while treatment and refining charges paid to China’s copper smelters are set to drop below $80 a tonne next year as processing capacity expands and copper concentrate falls into a deficit.

LME aluminium ended up 1.4 percent at $ 2,069 a tonne, although down 2.6 percent for the week, after forecasts that European customers would avoid deals with Russian producer Rusal, which is under U. S. sanctions, at an industry event next week.