|21 November, 2019

Copper falls as U.S.-China trade deal remains elusive

Benchmark copper on the London Metal Exchange was down 0.4% at $5,851 a tonne

Image used for illustrative purpose. A shipment of copper is seen in the port of Valparaiso city, about 121 km (75 miles) northwest of Santiago, June 29, 2009.

Image used for illustrative purpose. A shipment of copper is seen in the port of Valparaiso city, about 121 km (75 miles) northwest of Santiago, June 29, 2009.

REUTERS/Eliseo Fernandez

MANILA  - Copper prices dropped on Thursday, after touching a one-week high in the previous session, as a possible delay in a much-awaited "phase one" trade deal between Washington and Beijing weighed on sentiment.

Benchmark copper on the London Metal Exchange was down 0.4% at $5,851 a tonne, as of 0331 GMT, while the most-active copper contract on the Shanghai Futures Exchange slipped 0.2% to 47,050 yuan ($6,685.04) a tonne.

Completion of a "phase one" U.S.-China trade deal could slide into next year, trade experts and people close to the White House said, as Beijing presses for more extensive tariff rollbacks while Washington counters with heightened demands of its own.

Officials from Beijing had earlier suggested that Chinese President Xi Jinping and U.S. President Donald Trump might sign a deal by early-December.

Possibly complicating the trade negotiations further, the U.S. House of Representatives on Wednesday passed two bills to back protesters in Hong Kong and send a warning to China about human rights, which the Senate passed the day before, angering Beijing.

"The Congressional vote on the HK protesters doesn't help get a trade deal done admittedly," said Robert Carnell, head of research, Asia-Pacific, at ING.

COPPER WEEK: Miner Freeport-McMoRan Inc and China's Jiangxi Copper have agreed treatment and refining charges (TC/RC) of $62 a tonne and 6.2 cents per pound for copper concentrate supply in 2020.

COPPER WEEK: The London Metal Exchange is considering creating a new market for "green" aluminium, using warehouse ownership documents to identify low-carbon material instead of spinning off a new futures contract.

COPPER SUPPLY: The global world refined copper market showed a surplus of 29,000 tonnes in August, compared with 71,000 tonnes deficit in July, the International Copper Study Group (ICSG) said in its latest monthly bulletin.

HUAWEI: The Trump administration on Wednesday gave Huawei its second reprieve this week, allowing some suppliers to restart sales to the Chinese telecoms giant after it was placed on a trade black list over national security concerns six months ago.

ING's Carnell said allowing U.S. companies to do business with Huawei, and reports that Trump was looking to exempt Apple from tariffs "could be the answer from the U.S. to China's request to roll tariffs back to the situation in May".

"But we do not expect China will accept these as a replacement for lifting tariffs, as these company level exemptions will not be written as a clause in any trade agreement," Carnell said.

ANTIDUMPING: The U.S. International Trade Commission on Wednesday said it had determined that U.S. industry was materially injured by below-cost imports of aluminum wire and cable from China, locking in U.S. antidumping and countervailing duties.

ALUMINIUM OUTPUT: Global primary aluminium output rose to 5.392 million tonnes in October from revised 5.222 million tonnes in September, data from the International Aluminium Institute (IAI) showed.

PRICES

Three month LME copper CMCU3

Most active ShFE copper SCFcv1

Three month LME aluminium CMAL3

Most active ShFE aluminium SAFcv1

Three month LME zinc CMZN3

Most active ShFE zinc SZNcv1

Three month LME lead CMPB3

Most active ShFE lead SPBcv1

Three month LME nickel CMNI3

Most active ShFE nickel SNIcv1

Three month LME tin CMSN3

Most active ShFE tin SSNcv1

ARBS

LMESHFCUc3

LMESHFALc3

LMESHFZNc3

LMESHFPBc3

LMESHFNIc3

($1 = 7.0381 yuan)

(Reporting by Enrico dela Cruz, Editing by Sherry Jacob-Phillips) ((enrico.delacruz@tr.com; +632 841-8934;))

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