Base metals have begun to climb, ever-so slightly, on hopes that the US and China can resolve their trade differences.
That’s the call from Reuters, which has reported that trade negotiators from the two countries will meet this week for a two-day discussion.
The trade war has effectively been going on for a year, and by the looks of things, the market just wants the matter resolved.
Three-month copper on the London Metal Exchange rose 0.2 percent to $5,977 ($A8,686) a tonne by the middle of overnight trade, while aluminium advanced 0.3 percent, nickel was up 0.4 percent, zinc increased 0.3 percent and lead edged up 0.3 percent.
Base metals are seen as more sensitive to industrial data than precious metals or battery metals, as they are commonly used in construction and consumer products.
There has been a rash of data over the last three months indicating the industrial sector in China may be slowing — which in turn has kept a lid on base metals prices.
Copper in particular has been muted over the course of the year, particularly from May as press coverage of the trade war began to ramp up.
Chart from LME, cash price settlements
However, the supply/demand tension for copper remains robust, with a supply shortage mounting for the metal.
Last week Reuters quoted LP Angel analyst Sergey Raevskiy as saying a way forward on the trade dispute would provide copper a lift.
“The deepening rift between the United States and China has been a headwind for metals. There needs to be a resolution to the trade dispute,” he said.
“But the Chinese are being careful, they have provided stimulus and will probably do more if necessary.
“There isn’t much downside from here for copper.”
This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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