Copper slipped on Wednesday as investors shrugged off upbeat comments from U.S. President Donald Trump about a potential trade deal with China, while the dollar hovered near a one-month peak against its peers.
Trump said he would intervene in the Justice Department’s case against a top executive at China’s Huawei Technologies if doing so would help close a trade deal. “Even when you get a glimmer of good news it can easily be reversed by a tweet. Until a trade deal is signed, markets are going to be ‘glass half empty’. Also some economic data is beginning to look a bit tired,” said William Adams, head of research at Fastmarkets.
“That said, underlying (supply) fundamentals for copper are strong and going to improve next year,” he added.
China, the world’s second-largest economy and consumer of nearly half of global copper supply, has agreed to cut tariffs on U.S.-built cars and auto parts to 15 percent from 40 percent currently. The dollar steadied near a month high, with the Federal Reserve widely expected to raise interest rates at its upcoming meeting. U.S. rates may be nearing a peak, but relative rate differentials still offer some support for the dollar. A stronger dollar makes dollar-priced metals more expensive to import for countries using other currencies.
* COPPER: Three-month copper on the London Metal Exchange (LME) dipped 0.5 percent to $6,134.50 a tonne by 1125 GMT, heading for falls of around 15 percent this year despite stocks at LME-registered warehouses at decade lows.
* COPPER SHORT POSITIONS: Copper exhibits a marginal net speculative short or sell position of 1.2 percent of open interest, according to estimates from broker Marex Spectron.
* CHINA LOANS: China’s banks extended more new loans than expected in November after a sharp drop the previous month, in a sign that recent government pressure on lenders to help struggling smaller firms may be starting to bear fruit.
* STEEL: Chinese steel prices ended three days of losses to edge higher, with top steelmaking city Tangshan planning further production cuts this month as it races to meet its air quality target this year.
* LEAD: Fitch revised down its LME lead forecast for 2019 to $2,350 a tonne from $2,450 as prices have underperformed in the second half of 2018, with long-term prices to fall on weaker global demand and surpluses.
