Copper jumped to its highest in three weeks, boosted by a weaker US dollar after a new round of US-China trade tariffs proved not as costly as expected.
China will levy tariffs on about $US60 billion worth of US goods in retaliation for US tariffs on $US200 billion worth of Chinese goods.
Washington’s new duties, however, were set at 10 per cent for now, rising to 25 per cent by the end of the year, rather than starting immediately at 25 per cent.
Overnight, benchmark copper on the London Metal Exchange surged to its highest since August 29 at $US6,145 a tonne, ending 0.6 per cent higher at $US6,121.
Zinc, meanwhile, closed three per cent higher at $US2,434 per tonne, its biggest advance in over a month.
‘In some ways the bad news had been priced into the markets and, if anything, the news on trade had been slightly less severe than we had thought it would be,’ said Capital Economic analyst Caroline Bain.
‘It’s still too early to talk about this as sustainable … It just seems to be a bit of a relief rally after all of the bad news.’
Base metals prices have slid this year, largely because of fears the US-China trade dispute could choke global economic growth and sap demand.
China is not afraid of ‘extreme measures’ the United States is taking in their trade war and will use the dispute as an opportunity to replace imports, promote localisation and accelerate development of high-tech products, state media said.
On-warrant stocks of copper rose to 152,750 tonnes but are still down 55 per cent from the 2018 peak touched in March.
Zinc stocks on the LME are near their lowest since April, whereas ShFE zinc inventories remain barely above a decade low.
The global zinc market deficit deepened to 32,500 tonnes in July, from 14,200 tonnes in June, data from the International Lead and Zinc Study Group (ILZSG) showed.
On-warrant stocks of lead available to the market in LME-registered warehouses jumped 18,850 tonnes, or 39 per cent, to 67,125 tonnes.
This lifted on-warrant stocks from their lowest levels since January 2009.
LME lead fell 2.4 per cent to $US2,025 a tonne, clocking its first decline in six sessions.
Aluminium ended down 0.4 per cent to $US2,026 a tonne, tin finished 0.5 per cent lower at $US18,870 and nickel rose 0.8 per cent to $US12,500.