Benchmark copper on the London Metal Exchange closed on Friday at $US6363 a tonne, up 4.6 per cent, after touching its highest since July. Andrey Rudakov
by Peter Hobson London | Copper notched its biggest one-day advance since May 2013 as investors calculated that a trade dispute between the United States and China could damage economic growth less than feared.
Benchmark copper on the London Metal Exchange closed on Friday at $US6363 a tonne, up 4.6 per cent, after touching its highest since July. It was up 6.5 per cent on the week.
Worries that trade barriers would curb demand for commodities had pushed industrial metals sharply lower, with copper plunging from a high of $US7348 in June to a 14-month low of $US5773 last month.
But these concerns eased after tariffs announced this week were set at lower rates than had been expected and China, the world's largest metals consumer, announced steps to boost its economy.
"There's been quite a change in sentiment," said Saxo Bank analyst Ole Hansen.
Advertisement
But copper would have to move above Fibonacci technical resistance at $US6375 a tonne to cement its rally, he added.
Revived appetite for riskier assets rippled through markets, with global shares hitting six-month highs and Chinese stocks also climbing.
The US currency, which has been viewed as a safe haven during the trade dispute, was weaker for a second week, supporting dollar-priced metals by making them cheaper for buyers with other currencies.
Signalling a tightening market, stocks of copper in LME-registered warehouses at 216,600 tonnes are down from nearly 400,000 tonnes in March. Inventories in Shanghai Futures Exchange warehouses fell 17.5 per cent to 111,029 tonnes in the week to Friday.
The global refined copper market showed a 45,000 tonne deficit in June after a 50,000 tonnes deficit in May, the International Copper Study Group (ICSG) said.
Cash copper on the LME flipped from a discount to a premium of $US16.50 over the three-month contact , suggesting less availability of nearby metal.
LME nickel ended 5 per cent higher at $US13,250 a tonne, the biggest rise since April. It was at three-week highs and up 4.7 per cent on the week
Stockpiles are falling in LME and ShFE warehouses and a global market deficit widened in July, the International Nickel Study Group said.
Nickel had broken above the technical and psychological level of $US13,000 and a near-term downtrend line coming in at $US13,010. It was butting against its 50-day moving average at $US13,257.
LME aluminium finished up 2.4 per cent at $US2091 a tonne, zinc rose 1.7 per cent to $US2496, lead ended 1.7 per cent up at $US2039 and tin gained 0.2 per cent to $US19,000.
AML Price at posting:
35.5¢ Sentiment: Buy Disclosure: Held
(20min delay)
