Copper slipped overnight as investors shrugged off upbeat comments from US President Donald Trump about a potential trade deal with China, while the dollar hovered near a one-month peak against its peers.
Trump said he would intervene in the Justice Department’s case against a top executive at China’s Huawei Technologies if doing so would help close a trade deal.
‘Even when you get a glimmer of good news it can easily be reversed by a tweet,’ said William Adams, head of research at Fastmarkets.
‘Until a trade deal is signed, markets are going to be ‘glass half empty’. Also some economic data is beginning to look a bit tired.’
‘That said, underlying (supply) fundamentals for copper are strong and going to improve next year’.
The dollar steadied near a month high, with the Federal Reserve widely expected to raise interest rates at its upcoming meeting.
US rates may be nearing a peak, but relative rate differentials still offer some support for the dollar.
A stronger dollar makes dollar-priced metals more expensive to import for countries using other currencies.
Three-month copper on the London Metal Exchange ended down 0.5 per cent at $US6,140 a tonne, heading for falls of around 15 per cent this year despite decade-low stocks at LME warehouses.
Copper is showing a marginal net speculative short or sell position of 1.2 per cent of open interest, according to estimates from broker Marex Spectron.
Chinese steel prices ended three days of losses to edge higher, with top steelmaking city Tangshan planning further production cuts this month as it races to meet its air quality target this year.
‘US production is expected to climb 67 per cent this year, as new aluminium expansion projects come online … adding to a globally oversupplied market,’ said SP Angel in a note, quoting the Economic Policy Institute think tank.
Fitch revised down its LME lead forecast for 2019 to $US2,350 a tonne from $US2,450 as prices have underperformed in the second half, with long-term prices to fall on weaker global demand and surpluses.
Aluminium ended flat at $US1,939 a tonne, steelmaking raw material zinc closed down 0.8 per cent at $US2,570, lead ended up 0.1 per cent at $US1,976, tin closed up 1.1 per cent at $US19,325.
Stainless steelmaking ingredient nickel ended 0.2 per cent higher at $US10,795 a tonne.