Industrial metals rose on Wednesday, after a senior U.S. official expressed optimism about progress in the scheduled trade talks with China this week, while positive economic data from China, the world’s biggest copper user, also lent support.
The United States and China “expect to make more headway” in trade talks this week, White House economic adviser Larry Kudlow said on Tuesday, as Chinese vice premier Liu He is due to resume talks with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Wednesday.
Activity in China’s services sector increased to a 14-month high in March as demand improved at home and abroad, a private business survey showed, adding to signs that government stimulus policies are gradually kicking in.
The Caixin/Markit services purchasing managers’ index (PMI) rose to 54.4, the highest since January 2018 and up from February’s 51.1, a four-month low. A reading above 50 indicates an expansion.
Caixin’s composite manufacturing and services PMI, also released on Wednesday, climbed to a nine-month high of 52.9 in March from 50.7 in February.
“Both numbers point to expansion and are significantly higher than expectations. For the moment the China recovery story is in the ascendant,” said John Browning, managing director of brokerage Bands Financial, in a note.
* COPPER: Three-month copper on the London Metal Exchange rose 1 percent to $6,490 a tonne by 0703 GMT, while the most active Shanghai copper contract advanced 0.5 percent to 49,510 yuan ($7,382.50) a tonne.
* LME PRICES: Benchmark nickel climbed 1.4 percent, on track for its biggest jump in three weeks, while zinc advanced 1.5 percent. London aluminium rebounded from losses earlier in the session, rising 0.2 percent.
All metals contracts on the Shanghai Futures Exchange (ShFE) closed higher on Wednesday, reversing earlier declines during morning trading.
* ALUMINIUM: “Supply from Russian aluminium company Rusal has resumed to Europe and the United States following sanctions being lifted at the end of January. Continued investment by the company will result in increased production capacity,” ANZ said in a note.
* LAS BAMBAS: Concern about copper supply disruptions returned after an indigenous community in Peru, which has been blocking roads to Chinese miner MMG Ltd’s Las Bambas copper mine, refused to negotiate with the government. The mine produces about 2 percent of global supply.
* NORSK HYDRO: Norsk Hydro said on Tuesday it could take months for its Karmoey aluminium plant in western Norway to return to full capacity after a power outage that cut production by about 10 percent.
* ZINC TC: Korea Zinc Inc and Teck Resources Ltd have agreed annual concentrate treatment charges (TC) of about $245 a tonne, 67 percent higher than last year, as mine supply ramps up, two industry sources said.