Copper futures rally on trade truce despite soft demand

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Copper futures rally on trade truce despite soft demand

On Monday, the 1st of July 2019, industry-grade metals rallied after Washington and Beijing had agreed to resume their troubled trade talk, while copper had spiked to its highest in six weeks, as a raft of tensions eased between the two global superpowers which had been contributing to a global slowdown for about twelve months.

In point of fact, leaders of US and China agreed to resume trade talk on last Saturday (June 29th) after both sides had offered some refreshment stands including an ease on Huawei ban and purchase of US agricultural products, however, an editorial of Chinese state-owned Xinhua had been quoted saying on Sunday (June 30th) that a long and cagey road ahead of the trade talks before the two countries could seal a deal.

However, despite a bundle of disdainful factory data all over Asia, including a technically recessed Chinese economy, jejune factory activities in Japan and reduced export in South Korea, industry-grade metals rose on Monday (July 1st) over a Sino-US trade deal optimism, while Benchmark Copper in London Metal Exchange added 1.4 percent so far to $6,075 a ton, its highest since May 20th, and mainland China copper rose by 0.7 percent to $6,918.03 per ton.

Adding that the Sino-US trade truce should add to a boost to base metals, ANZ wrote in a client note, “The markets hopes were realized, with Trump and Xi agreeing to resume talks. This should boost sentiment in the base metals sector”.

Nonetheless, amid a tempestuous trade and factory activity outlook in major economies, Shanghai aluminum eased 0.7 percent, tin tumbled 0.7 percent and London nickel dropped 0.8 percent to $12,590 per ton, while mainland China nickel retreated by 1.8 percent.