Copper rose on Wednesday on reports of progress towards an initial U.S.-China trade deal, though gains were capped by scepticism in some quarters. Bloomberg reported that the United States and China were moving closer to agreeing on the amount of tariffs to be rolled back in a “phase one” trade deal and U.S. President Donald Trump said talks were going well. This was a more positive tone than his comments the previous day, when Trump warned that a deal may not be possible until late next year, pushing copper prices to their lowest in almost three weeks.
“We are seeing a short rebound in some metals today, but it’s a rebound from low levels,” said Commerzbank’s head of commodities research, Eugen Weinberg. He added that the trade talks were “making one step forward and one and a half steps back”.
Benchmark copper prices on the London Metal Exchange (LME) ended 1.2% higher at $5,886 a tonne after shedding 1.1% in the previous session.
The LME index hit its lowest in three months, putting it within striking distance of the weakest since mid-2017.
TRADE: Progress in talks bodes well for metals demand, particularly for copper, which is usually viewed as a gauge for economic health. China accounts for about half of metals demand.
INVENTORIES: Copper stocks in LME-registered warehouses fell to their lowest in nearly seven months, shedding 1,100 tonnes to 114,000 tonnes. MCUSTX-TOTAL
However, spreads were unaffected by LME supply tightness, with the discount between LME cash copper and the three-month contract deepening to $25 a tonne from $7.50 nearly a month ago CMCU0-3.
SCRAP: China has issued a seventh batch of import quotas for scrap metal, including 17 quotas for a total of 7,970 tonnes of high-grade copper scrap, according to a notice from a unit of the environment ministry.
RIO TINTO: Miner Rio Tinto said it would spend $1.5 billion to expand its Kennecott copper project in Utah, United States.
COBALT: South Korean battery maker SK Innovation signed a six-year deal to buy up to 30,000 tonnes of cobalt from Glencore, allowing it to produce batteries for 3 million electric vehicles.
NICKEL SUPPLY: Brazil’s Vale SA plans to exit its troubled New Caledonia assets but still aims to ramp up nickel output ahead of rising demand for electric batteries, executives said on Wednesday.
COLUMN: Copper smelters feel the squeeze as mine supply falters.
PRICES: LME aluminium slipped 0.5% to $1,758 a tonne, zinc rebounded from a four-month low in the previous session, gaining 2% to $2,245, while lead edged up 1.2% to $1,922. Tin was unchanged at $16,750 and nickel lost 1.9% to $13,120.
