Copper slipped overnight after weak data from the economy of top metals consumer China but other industrial metals prices edged higher on hopes for more stimulus.
China reported the worst-ever monthly sales drop in the world’s largest car market while factory inflation slowed in May as faltering manufacturing hit demand.
“The stimulus which has been put into the economy since last year has not been sufficient to really stabilise it and the Chinese government sees more need to stimulate,” said analyst Carsten Menke at Julius Baer in Zurich.
“We’re looking for a bit of a rebound in global growth in the second half, in the US and also in China – where we do expect a stabilisation – and this should provide some upside to metals prices. Positioning has turned quite bearish, a lot of negative news is already priced in the market.”
Three-month copper on the London Metal Exchange slipped 0.4 per cent to $US5,852 a tonne in closing open outcry trading, moving back towards a five-month low of $US5,740 touched on Monday.
But LME aluminium added 0.7 per cent to trade at $US1,790 in closing rings, heading away from a 29-month nadir reached on Monday.
Some Japanese aluminium buyers have agreed to pay a premium of $US108 per tonne for shipments in July to September, up three per cent from the current quarter, amid tighter supply in Asia, sources said on Wednesday.
Sentiment has been hit by worries about expected talks between the Chinese and US leaders later this month after sources told Reuters there has been little preparation for a meeting and expectations were low for progress at ending the trade conflict.
“All of these trade talk uncertainties have put base metals or commodities space into hostage. If this overarching issue is not removed or diminished, there’s no way for base metals to have any meaningful direction,” said analyst Helen Lau at Argonaut Securities.
Zambia’s Konkola Copper Mines, owned by Vedanta Resources, plans to restart its Nchanga smelter on June 22 , the company said on Wednesday.
The premium of cash LME lead over the three-month contract remained relatively strong at $US33.50 a tonne at Tuesday’s close, down from $US42.50 touched a day earlier – the highest since January 2017 and indicating shortages of available supplies.
LME nickel did not trade in closing rings and was down 0.4 per cent at $US11,835 a tonne in electronic trading.
“Reports of Indonesia flooding affecting loading of nickel ore at ports as well as production at local NPI (nickel pig iron) mills,” broker Marex Spectron said in a note.
Zinc gained 0.1 per cent to close at $US2,509, lead shed 0.8 per cent to $US1,898 and tin gained 0.7 per cent to $US19,300.