Copper touches 1-week peak on easing US, China trade tension1 min read . Updated: 13 Dec 2018, 06:24 PM IST
Copper hit its highest in more than a week on Thursday after US-China trade tensions eased, but gains were capped due to persistent worries about Chinese demand and global growth
London: Copper hit its highest in more than a week on Thursday after US-China trade tensions eased, but gains were capped due to persistent worries about Chinese demand and global growth.
China made its first purchases of US soybeans since President Donald Trump and his Chinese counterpart Xi Jinping struck a trade war truce earlier this month, while China also appeared to be easing its high-tech industrial push.
“We’re in this weaker seasonal period and economic data points aren’t going to be great, but the way the market is looking at it, any de-escalation of trade friction is viewed as positive for commodities and that’s going to overarch anything else. We’re very macro driven at the moment," said Colin Hamilton, director of commodities research at BMO Capital.
Some investors may also be unwinding a wider trade that’s been in place for much of the year, going long on the dollar and short on commodities.
“Trading days before year-end are few and far between so I think there could be a little bit of upside (for metals) if there’s some profit-taking on that trade," Hamilton added.
Copper on the London Metal Exchange is down 14.5% year-to-date, largely on fears the trade tensions will hurt demand for industrial metals.
Three-month LME copper was up 1.4% at $6,223 a tonne by 1035 GMT after touching $6,231, the highest since 4 December.
■ Aluminium stocks: LME on-warrant aluminium inventories, those stocks not earmarked for delivery, rose by 24,950 tonnes to 853,375 tonnes, LME data showed on Thursday. They have surged 40% since the beginning of October.
LME benchmark aluminium shed 0.3% to $1,933.50 a tonne.
■ Nickel: Short covering overnight boosted nickel, Alastair Munro at broker Marex Spectron said in a note. LME nickel gained 1% to $10,905 a tonne.
■ Larco: Greece’s Public Power Corp will not cut the electricity supply to Larco before the start of the new year as the government works on a plan to avert a closure of Europe’s biggest nickel producer.
■ Index reweighting: The annual reweighting of key commodity indexes in January will affect about 10.5% of average daily volumes (ADV) of zinc over each of five days and 7.7% of aluminium ADV, Societe Generale said in a note.