Copper dips as market awaits Trump-Xi meeting
LONDON — Copper prices slipped on Monday as doubts over the outcome of US-China trade talks later this week overshadowed the effect of a weaker dollar and supply disruption in Chile.
Benchmark copper on the London Metal Exchange (LME) closed 0.2% lower at $5,960 a ton, down from a one-month high of $6,027 on Thursday.
The metal used in power and construction had recovered slightly in recent weeks after tumbling 15% between mid-April and mid-June as US President Donald Trump ramped up disputes with China and Mexico.
Investors fear trade confrontations will damage economic growth and metals demand. Investors are waiting for a meeting between Mr. Trump and his Chinese counterpart Xi Jinping at a G20 summit on June 28-29, said Commerzbank analyst Daniel Briesemann.
A trade deal or truce would push prices higher, while failure to agree would drag copper down, he said, noting that “[s]kepticism among speculative investors in particular is still very high. These investors are still betting on lower copper prices.”
“The latest Chinese macro data remain concerning for commodities demand into 3Q with property new starts slowing and infrastructure spending remaining subdued,” analysts at Citi said in a note.
China is the world’s largest metals consumer.
Elsewhere, US manufacturing activity barely grew in early June and the service sector cooled, while German business morale deteriorated for the third month in a row in June.
The dollar weakened further on Monday after slipping 1.4% last week, making dollar-priced metals cheaper for buyers with other currencies.
Signals are mixed for LME copper, as it failed to break resistance at $5,989 per ton. Speculators’ net short position in LME copper fell to 3.5% of open contracts as of Thursday’s close, brokers Marex Spectron said.
Labor unions at Chile’s huge Chuquicamata copper mine voted on Saturday last week to reject a contract offer and continue their week-long strike.
China’s imports of scrap metal in May rose 8.6% from the previous month to 380,000 tons, customs data showed on Sunday, with scrap aluminum imports the highest since March 2018.
The Chinese environment ministry has also granted 240,000 tons of quotas for imports of highgrade scrap copper, which is being restricted from July 1.
LME zinc rose 2.4% in closing open-outcry trading to $2,491 a ton after touching $2,412, the weakest since Jan. 4, on Friday.
Among other industrial metals, LME aluminum ended up 1.4% at $1,793 a ton; nickel gained 0.4% to $12,140; lead rose 0.7% to $1,913; and tin closed 0.4% higher at $19,075. —