Copper prices touched their highest in nearly eight months overnight after US President Donald Trump said he was optimistic that a final trade deal could be reached with China, though he warned that an agreement might not happen.
Markets were upbeat after Trump said on Sunday that he would delay an increase in tariffs on Chinese goods, a move seen as a step towards a deal being reached in the months-long trade dispute.
Benchmark copper on the London Metal Exchange (LME) touched its highest since July 4 at $US6,540 a tonne but finished little changed at $US6,480.
‘For copper, it’s the hopes about easing trade tensions between the US and China, and we saw further evidence over the weekend that this is happening,’ said Julius Baer commodities research analyst Carsten Menke.
He added that sentiment was also boosted by positive credit data, even though it would not directly affect copper demand.
On-warrant LME copper inventories available to the market fell by 6,350 tonnes to 33,450 tonnes, the lowest level since August 2005.
Supply shortage concerns, a stronger Chinese currency and looser credit conditions have boosted sentiment in copper, said Saxo Bank’s head of commodity strategy, Ole Hansen.
China imports of copper scrap fell 11.5 per cent year on year to 180,000 tonnes in January.
It was the first month that imports of 32 extra types of solid waste, including lower-grade scrap copper, were banned as part of China’s crackdown on foreign rubbish.
Import premiums for physical copper in China slipped to as low as $US52 a tonne, the lowest since May 2017.
Speculative positioning in copper moved from a marginal net short to a net long of 4.7 per cent, or 7,900 lots, broker Marex Spectron said in a note, adding that this was a level not reached since June 2018.
Chinese miner MMG said it will have to delay some shipments of copper concentrate from Peru’s Matarani Port because of a blockade by an indigenous community of a road used to transport copper from the Las Bambas mine.
China’s imports of primary aluminium from Russia rose tenfold year on year in January, data released by the General Administration of Customs showed on Monday.
A unit of Inner Mongolia Xingye Mining halted production after an accident that killed 21 people at a mine on Saturday.
Tin rose 1.1 per cent to $US21,740 a tonne after touching a peak of $US21,795, its highest in more than a year.
Aluminium fell 0.3 per cent to $US1,906.50, zinc edged down 0.2 per cent to $US2,719, lead rose 0.6 per cent to $US2,087 and nickel ended 0.1 per cent down at $US12,975.