London Metal Exchange red metal prices rose for a sixth consecutive session today 20 February as market prices in daring hopes of a trade truce deal between Sino – United States. Trump assured that talks progressed well and that the 01 March deadline was not a magical date as he is willing to extend beyond this date as the two super powers address structural issues. At stake is USD$200billion worth of Chinese imports are scheduled to rise to 25% from 10% should no agreement not be reached. Metal analysts expect that a no deal agreement would weigh on copper demand and prices.
“Optimism around the trade deal has been a key reason behind the price recovery, so any trade talks could again spook negative sentiment across the metals,” ANZ said in a note.
The most-traded April copper contract on the Shanghai Futures Exchange gained as much as 0.9% to 49,790 yuan (USD$7,404.16/MT), the highest since Dec. 5 and stood at 49,650 yuan a tonne by the end of the morning session.
The premium of cash copper over the three-month LME contract (CMCU0-3) was at $25/MT on Tuesday, versus a discount of $14.25/MT a week earlier, indicating tighter near-term supply.
The entire LME complex made modest gains, with aluminium adding 0.5%. Shanghai lead was the sole laggard, slipping 0.1%.