Copper rally stalls as Trump revives trade war fears

LONDON — Copper was set for a fifth week of gains on Friday but the rally faltered after US President Donald Trump said he did not plan to meet China’s Xi Jinping before a March 1 deadline for the two countries to achieve a trade deal.

The news reignited concern that the US-Chinese row will worsen, damaging the already weakening global economy and curtailing demand for industrial metals.

Global equities markets fell and the US dollar was on track for its biggest weekly rise in six months, further pressuring metals by making them more expensive for buyers holding other currencies.

Benchmark copper on the London Metal Exchange (LME) closed down 0.6% at $6,210 a ton, but was still up around 1.2% last week after touching a two-month high of $6,289.50 on Thursday.

“New concerns about the trade dispute are clearly weighing on prices,” said Commerzbank analyst Daniel Briesemann, adding that an escalation could send copper back towards January’s oneand-a-half-year low of $5,725 a ton.

But he said that, if the two sides reach a deal, copper could rise as high as $6,800 in the second quarter, helped by supply shortfalls.

The White House said the next round of US trade talks with China will begin on Feb. 11.

The European Commission and the Bank of England have sharply cut their forecasts for economic growth in the euro zone and Britain.

On-warrant copper stocks available to the market in LMEregistered warehouses have fallen to 87,725 tons from about 130,000 tons in mid-January and are near decade lows, pointing to an undersupplied market.

Chilean state miner Codelco said heavy rains had forced a suspension of operations at its northern copper mines Chuquicamata and Ministro Hales.

Cash zinc has moved from a premium to a discount against the three-month LME contract for the first time since September, suggesting shortages in nearby supply are easing.

Russia’s Rusal said it expected aluminum demand to grow in 2019 and saw potential for prices to rise. It said production outside China was flat at 27.6 million tons in 2018 while demand rose by 2.8% to 30 million tons.

LME aluminum ended down 0.7% at $1,880 a ton; zinc fell one percent to $2,704; lead closed unchanged at $2,080; and tin rose 0.5% to $21,050.

Nickel, which had seen the biggest rally of any industrial metal in recent weeks, finished down 3.2% at $12,570 a ton, falling below its technically important 200-day moving average. —