June 24 (Reuters) – Copper prices slipped on Monday as doubts over the outcome of U.S.-China trade talks later this week overshadowed the effect of a weaker dollar and supply disruption in Chile.
Benchmark copper on the London Metal Exchange (LME) did not trade in official rings but was bid 0.7% lower at $5,932 a tonne, down from a one-month high of $6,027 on Thursday.
The metal used in power and construction had recovered slightly in recent weeks after tumbling 15% between mid-April and mid-June as U.S. President Donald Trump ramped up disputes with China and Mexico.
Investors fear trade confrontations will damage economic growth and metals demand.
Investors are waiting for a meeting between Trump and his Chinese counterpart Xi Jinping at a G20 summit on June 28-29, said Commerzbank analyst Daniel Briesemann. A trade deal or truce would push prices higher, while failure to agree would drag copper down, he said.
“Scepticism among speculative investors in particular is still very high. These investors are still betting on lower copper prices,” he said.
TRADE WAR: Both China and the United States should make compromises in trade talks, Chinese Vice Commerce Minister Wang Shouwen said on Monday. CHINA DEMAND: “The latest Chinese macro data remain concerning for commodities demand into 3Q with property new starts slowing and infrastructure spending remaining subdued,” analysts at Citi said in a note. China is the world’s largest metals consumer.
U.S. ECONOMY: U.S. manufacturing activity barely grew in early June and the service sector cooled.
GERMANY: German business morale deteriorated for the third month in a row in June.
DOLLAR: The dollar weakened further on Monday after slipping 1.4% last week, making dollar-priced metals cheaper for buyers with other currencies.
TECHNICALS: Signals are mixed for LME copper, as it failed to break a resistance at $5,989 per tonne.
POSITIONING: Speculators’ net short position in LME copper reduced to 3.5% of open contracts as of Thursday’s close, brokers Marex Spectron said.
CHILE STRIKE: Labour unions at Chile’s huge Chuquicamata copper mine voted on Saturday to reject a contract offer and continue their week-long strike.
CHINA SCRAP: China’s imports of scrap metal in May rose 8.6% from the previous month to 380,000 tonnes, customs data showed on Sunday, with scrap aluminium imports were the highest since March 2018. The Chinese environment ministry has also granted 240,000 tonnes of quotas for imports high-grade scrap copper, which is being restricted from July 1.
OTHER METALS: LME aluminium traded up 0.3% at $1,772.50 a tonne, zinc was bid 1.2% higher at $2,461, nickel traded up 0.3% at $12,125, lead traded down 0.3% at $1,895 and tin was bid 0.4% lower at $18,950.