|12 September, 2019

Copper jumps 1.3% on Trump's tariff delay; focus on ECB

Three-month copper on the London Metal Exchange rose as much as 1.3% to $5,848.50 a tonne and stood at $5,844

Copper rods are seen at Truong Phu cable factory in northern Hai Duong province, outside Hanoi, Vietnam August 11, 2017. Image used for illustrative purposes

Copper rods are seen at Truong Phu cable factory in northern Hai Duong province, outside Hanoi, Vietnam August 11, 2017. Image used for illustrative purposes

REUTERS/Kham/File Photo

BEIJING - London copper prices rose 1.3% on Thursday after U.S. President Donald Trump agreed to a delay in hiking tariffs on $250 billion worth of Chinese goods by two weeks, while investors awaited news on a possible European Central Bank (ECB) rate cut.

The ECB will hold a meeting in Frankfurt on Thursday, where it is set to unveil fresh stimulus measures to prop up the ailing euro zone economy. Lower interest rates tend to push commodity prices higher because they mean lower inventory financing costs.

Copper, considered a bellwether for economic health, dived 17.7% in London in 2018 and has shed another 2% so far this year, weighed down by concerns the Sino-U.S. trade war will hurt demand for industrial metals.

The discount of cash LME copper over the three-month contract was last assessed at $33.75 a tonne, the biggest discount since May 22.

"The large contangos at the front of the curve seem to highlight how disappointing real demand is in the physical market," Marex Spectron said in a note.

FUNDAMENTALS

* COPPER: Three-month copper on the London Metal Exchange rose as much as 1.3% to $5,848.50 a tonne and stood at $5,844, as of 0431 GMT, having closed 0.9% lower on Wednesday.

The most traded November copper contract on the Shanghai Futures Exchange ended the morning session up 0.2% at 47,300 yuan  ($6,676.36) a tonne, on course for a weekly dip of 0.5%.

* LME: The LME complex was mixed, with nickel climbing 1.2% and zinc adding 0.4%, while lead slipped 0.1%, aluminium dipped 0.2% and tin shed 1.4%.

* SHFE: The ShFE will be closed on Friday for China's Mid-Autumn Festival, reopening on Monday. It will report weekly stocks data later in the day.

* HKEX: Hong Kong Exchanges and Clearing Ltd (HKEX) , the owner of the LME, unveiled a $39 billion takeover approach to the London Stock Exchange Plc  on Wednesday that received a cool response from investors concerned about its regulatory and financial hurdles.   

MARKETS NEWS   

* Asian stocks hit a six-week high on hopes for a thaw in U.S.-China trade frictions and expectations that the European Central Bank would kick off another wave of monetary easing by global central banks.   

(Reporting by Tom Daly; Editing by Rashmi Aich and Sherry Jacob-Phillips)

© Reuters News 2019

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