Copper has risen for a fifth straight session, with hopes of a resolution to the US-China trade war outweighing the threat of higher US tariffs on Chinese goods.
Three-month copper on the London Metal Exchange ended 0.9 per cent higher at $US6,259 a tonne, having gained 2.5 per cent last week.
‘Metals could benefit from a possible truce in the US-China trade war during the upcoming G20 summit,’ said JP Morgan analyst Natasha Kaneva, adding that she considered spot contracts to be undervalued by about 10 pe rcent.
US President Donald Trump last week said China was willing to take steps to resolve the prolonged US-China trade conflict, but Vice President Mike Pence said on Saturday that the United States might double its tariffs unless Beijing bows to US demands.
Deep divisions on trade between Washington and Beijing were evident at the Asia-Pacific Economic Cooperation summit, with leaders on Sunday failing to agree on a communique for the first time in their history.
Headline inventories of copper in LME-registered warehouses fell by 9,400 tonnes to 151,625 tonnes, nearing last month’s 10-year low of 136,675 tonnes.
The premium for cash copper over the three-month contract rose to $US21.50 a tonne from $US18.50 on Friday, pointing to a tighter market. It touched $US47 on October 26, its highest since January 2015.
The dollar slipped against other leading currencies after US Federal Reserve officials expressed caution over the global growth outlook, prompting traders to reassess the pace of future U.S. interest rate increases.
Nickel fell 1.6 per cent to close at $US11,180 a tonne, its lowest since December 15 last year.
Russian nickel and palladium producer Norilsk Nickel plans to boost output over the next five years to tap an expected boom in demand from electric vehicle makers, its CEO and top shareholder said.
Nickel output in the Philippines, a major supplier, is expected to increase after the Environment Ministry said that nine suspended mines will be allowed to resume operations if they rectify previous violations of environmental regulations.
A slide in zinc inventories on the LME to their lowest in more than a decade has wrong-footed bearish investors who are scrambling to cover or roll over futures positions before the November contract expiry.
Aluminium edged down 0.3 per cent to $US1,934 a tonne, zinc lost 0.3 per cent to $US2,600, lead closed 0.2 per cent up at $US2,002 and tin rose 1.3 per cent to $US19,600.