Copper rose to a one-week high on Monday as fears over a US-China trade war eased, countering the impact of a rising dollar, while nickel came under pressure from falling ferrous metals prices in China.
The dollar hit a five-month high versus a currency basket, making dollar-priced metals costlier for non-US investors and capping the upside in metals. Gold touched a 2018 low.
‘Copper hasn’t fallen significantly whereas the dollar has had a nice recovery in recent months. (It tells you) people are convinced demand will outweigh supply growth,’ FOREX.com analyst Fawad Razaqzada said.
That risk-on sentiment was not enough to support stainless-steelmaking ingredient nickel, which came under pressure after Chinese iron ore prices plunged more than three per cent on uncertain prospects for steel demand.
US Treasury Secretary Steven Mnuchin declared the US trade war with China ‘on hold’ following an agreement to drop tariff threats that had roiled global markets this year.
* COPPER: Three-month copper on the London Metal Exchange ended up 0.4 per cent at $US6,879 a tonne, having hit a one-week high of $US6,923.
* NICKEL: Nickel closed down 0.5 per cent at $US14,675 a tonne, after Dalian iron ore touched a two-week low amid reports steel mills may postpone raw material purchases due to uncertainty over demand.
‘Given iron ore’s 3.5 per cent decline, nickel has held up remarkably well. Late Friday saw Vale’s CEO report they are taking out 150,000 tonnes of production for the next three years,’ Marex Spectron said in a note.
* CHINA STEEL CAPACITY: China will send eight inspection teams to conduct spot overcapacity checks on the iron and steel industry in 21 regions from May 22 to June 15, the country’s state planner said.
* ALUMINIUM: Aluminium closed up 0.4 per cent at $US2,280 amid news that UC Rusal has not yet received any formal notice that sanctions target Oleg Deripaska has resigned from his board position at major Rusal shareholder EN+.
* ALUMINIUM OUTPUT: Global primary aluminium output fell to 5.256 million tonnes in April from a revised 5.372 million tonnes in March, data showed.
* CHINA ECONOMY: China’s economy will likely expand by around 6.7 per cent in the second quarter this year, the State Information Center said on Saturday.
* OTHER METALS: Zinc closed up 0.2 per cent at $US3,104, having hit a three-week high, lead ended up 3.4 per cent at $US2,410 after hitting a one-month high, while tin closed down 0.4 per cent at $US20,700.