Copper prices rose on Thursday as the dollar weakened and the market waited for cues from China-US trade talks underway in Beijing.
The world’s two biggest economies have imposed import tariffs on each other’s goods, including Chinese aluminium and US aluminium scrap, and threatened more action in a trade dispute that has roiled metals markets.
Copper closed up 0.1 per cent at $US6,827 a tonne, after touching a one-week high of $US6,792 and marking the second straight session of gains.
‘The dollar is a little weaker this morning, meaning higher metal prices, and that is what we see across the board in precious metals as well,’ said Julius Baer analyst Carsten Menke.
He added that trade talks between China and the United States could drag on for weeks and that the first round of talks were unlikely to yield much.
TRADE: A US trade delegation arrived in Beijing on Thursday for tariffs talks, with Chinese state media saying that China will stand up to US bullying if needed, but that it is better to work things out at the negotiating table.
US DOLLAR: The US dollar index slipped from four-month highs in the morning but was choppy in later trading, weighing on metals. A weaker greenback makes dollar-denominated commodities cheaper for non-US firms.
The dollar recovered after data showed the US trade deficit narrowed sharply in March and the number of Americans receiving unemployment aid fell to its lowest level since 1973 .
ZINC: Benchmark zinc ended down 1.3 per cent at $US3,007 a tonne after sinking to $US2,994, the lowest since September 15 last year after treatment charges were agreed.
ZINC TREATMENT CHARGES: The zinc industry agreed a 15 per cent drop in annual zinc processing fees to $US147 a tonne, miner and metals smelting company Nyrstar said.
ING analyst Oliver Nugent said in a note that the settlement showed the zinc market was at a turning point and ‘reflects expectations that mine supply will soon loosen significantly’.
STOCKS: Headline inventories of zinc in LME-approved warehouses dropped by 225 tonnes to 236,775 tonnes. The amount of cancelled inventory – stock earmarked for delivery – was very low at 5.6 per cent, LME data showed.
PRICES: Aluminium shed 2.3 per cent to close at $US2,269 a tonne, lead fell 0.4 per cent to $US2,260, tin rose 0.6 per cent to finish at $US21,205 and nickel lost 1.5 per cent to $US13,775.