Copper clocked up a fifth weekly loss as trade tensions between the US and China rumbled on, while aluminium hit a three-month low ahead of a summit between US President Donald Trump and Russian President Vladimir Putin.
Trump and Putin are due to meet in Helsinki on Monday and aluminium investors are looking for any hint that US sanctions on Rusal, the world’s second-biggest aluminium producer, will be eased or lifted.
“There’s an expectation that if you’re going to see the sanctions removed from Rusal it may come out of the meeting (between Trump and Putin),” Nick Snowdon, metals strategist at Deutsche Bank, said.
On the trade dispute between the US and China, he said speculative investors in copper were neutrally positioned, reflecting a cautious attitude amid economic uncertainty.
“In copper you had probably the single largest (long) position ever liquidated (on the Shanghai Futures Exchange) in June. That’s done and dusted, so that (trade) uncertainty (now) lends itself to investors staying on the sidelines and prices stabilising.”
Three-month copper on the London Metal Exchange closed up 0.2 per cent at $US6,238 a tonne, but was down 1 per cent for the week.
Copper has fallen some 15 per cent in five weeks of losses.
Aluminium closed down 0.5 per cent at $US2,031 a tonne, having hit its lowest since early April at $US2,021.50.
Indicating nearby tightness, cash aluminium traded at a premium of $US49.50 a tonne to the three-month price, its highest level since early April.
China’s trade surplus with the US swelled to a record in June, a result that could further inflame a bitter trade dispute with Washington.
China’s aluminium exports exceeded half a million tonnes for the second time ever in June, while steel exports hit an 11-month high, defying US tariffs.
Analysts have raised their 2018 growth forecasts for China’s economy, a surprising result given an escalating trade war with the United States.
Copper prices are being pressured by concern about rising supply after Indonesia on Thursday struck an agreement with Freeport-McMoRan and Rio Tinto to buy a controlling stake in the world’s second-biggest copper mine, Grasberg.
Zinc closed down 0.1 per cent at $US2,578, lead ended down 0.6 per cent at $US2,202, tin closed up 0.8 per cent at $US19,795 while nickel ended down 1.6 per cent at $US13,970.