Copper held near five-week highs overnight after reports that the United States and China had struck a truce on trade ahead of a weekend meeting although there was still uncertainty over the likelihood of a full deal being reached.
The South China Morning Post reported the truce on Thursday, ahead of the two-day meeting, raising hopes for an end to a trade conflict which has sapped metals demand.
Capital Economics senior commodities economist Ross Strachan cautioned there are “fundamental disagreements” between the two sides and that this was unlikely to be fully hashed out at the meeting in Japan.
“We are cautious on the likelihood of a deal this weekend, and how sustainable any deal would be as well,” he said, adding that there was “some degree of nervousness to not over-read the signals”.
Hopes for a resolution to the damaging tit-for-tat trade war had boosted prices for the metal used in power and construction on Wednesday to a five-week high of $US6,063.50 a tonne.
Benchmark copper on the London Metal Exchange (LME) ended unchanged on the previous session at $US5,988 per tonne.
Prices briefly jumped after part of a copper and cobalt mine owned by Glencore collapsed in the Democratic Republic of Congo, killing at least 36 illegal miners according to the provincial governor.
Glencore said the incident had no impact on production.
A Chinese commerce ministry spokesman said on Thursday that China opposes US abuse of export controls and urges the United States to return to a track of co-operation, days before the countries’ leaders are set to meet for trade talks.
Unions at Chile’s Chuquicamata mine said they will vote again on Thursday on a contract offer from Codelco, the world’s largest copper producer, amid growing hopes of ending a two-week strike that has docked output.
Global refined copper output showed a shortage of 32,000 tonnes in the first three months of the year compared with a 81,000 tonne surplus a year earlier.
Chinese Yangshan import premiums slipped for a second session to $US57.50 per tonne over LME cash, still above last month’s two-year low of $US47.
Bolstered by improving sales and better margins, profits for China’s industrial companies rose in May, bucking a months-long downtrend.
The port of Sanshan in southern China’s Guangdong province stopped accepting scrap metal shipments on Thursday after an excessive build-up of stockpiles caused by importers racing to bring in cargoes ahead of new rules starting next week.
Aluminium fell 1.6 per cent to $US1,790 per tonne, zinc eased 1.2 per cent to $US2,475, lead ended 0.6 per cent higher at $US1,941 and tin finished 0.4 per cent higher at $US18,850.
Nickel added 1.8 per cent to $US12,710 a tonne after touching its highest since April 18.