Copper rises as supply concerns outweigh trade talk doubts

PHOTO

SINGAPORE - Copper prices advanced on Tuesday as supply disruption at a major copper mine supported prices, while uncertainty around Sino-U.S. trade resolution capped gains as investors worried about global economic growth and demand for industrial metals.

Workers at Chuquicamata, one of the world's biggest copper mines, have been on strike since mid-June to demand better healthcare and retirement benefits, hurting output of Chile's state-run Codelco, the world's top copper producer.

"Supply side issues overweighed concerns about the economic backdrop. Copper prices remained supported by the ongoing strike at Codelco's Chuquicamata copper mine," said ANZ in a note.

Three-month copper on the London Metal Exchange rose 0.3% to $5,975 a tonne by 0400 GMT, while the most-traded copper contract on the Shanghai Futures Exchange (ShFE) advanced 0.2% to 46,900 yuan ($6,816.86) a tonne.

But the price hike was not stable, with copper prices on Tuesday at some point retreating back to almost being unchanged from the previous session during the morning Asian trading hours.

"The fundamentals now have little impact on the futures market. Prices now have more connection with the macro side...such as exchange rate and trade war," said CRU's copper analyst He Tianyu based in Beijing.

Investors are keeping a close watch on a scheduled talk between U.S. President Donald Trump and Chinese President Xi Jinping later this week, but sentiment was not helped by reports that Trump would be content with "any outcome".

Trump said he viewed this week's meeting with Xi as a chance to see where Beijing stands on the two countries' trade war and is "comfortable with any outcome" from the talks. Meanwhile, China said both nations should make compromises in trade talks.

FUNDAMENTALS

* TESLA/JAPAN ALUMINIUM: The U.S. Commerce Department has agreed to Tesla Inc's request to waive 10% tariffs on imported aluminium from Japan used in the manufacture of battery cells at Tesla's Nevada Gigafactory.

* COPPER DEFICIT: The global world refined copper market showed a 51,000 tonnes deficit in March, compared with a 72,000 tonnes surplus in February, the International Copper Study Group said in its latest monthly bulletin.

* CHINA LEAD: China's top lead maker Henan Yuguang Gold and Lead Co on Tuesday shut down one production line at a lead smelter in Jiyuan for a 30-day maintenance that will affect some 10,000 tonnes in output, its sales director said.

* SHFE LEAD: Lead futures prices on ShFE rose as much as 1.6% to near a one-week high of 16,290 yuan a tonne but retreated later in the morning session to rise 1% at the midday break.

* OTHER PRICES: Benchmark aluminium rose 0.3%, nickel increased 0.5% and zinc eased 0.2%. In Shanghai, aluminium advanced 0.5%, nickel was up 0.8% while zinc jumped 1.8%.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin