Commodities

Copper rises as investors cheer trade talks, Covid-19 treatment

Reuters August 26 | Updated on August 26, 2020 Published on August 26, 2020

FILE PHOTO: Copper cathodes   -  REUTERS

Weaker US dollar makes greenback-priced LME metals cheaper to buyers holding other currencies

Copper prices rose on Wednesday on optimism over progress in US-China trade talks and signs that researchers might be closer to a treatment for the coronavirus.

Three-month copper on the London Metal Exchange gained 0.2 per cent to $6,543.50 a tonne by 0404 GMT, while the most-traded October copper contract on the Shanghai Futures Exchange advanced 0.2 per cent to 51,390 yuan ($7,444.16) a tonne.

British drugmaker AstraZeneca has begun trials of its antibody-based drug for the treatment and prevention of Covid-19, the latest development in a global race to combat the pandemic.

Top US and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal, which has seen China lagging on its obligations to buy American goods.

“The general feel is that trade talks went smoothly. Vaccine news is encouraging. Copper stocks are below 100,000 tonnes in the LME warehouses, while the US dollar has resumed its downward trend,” said a Singapore-based metals trader.

A weaker US dollar makes greenback-priced LME metals cheaper to buyers holding other currencies.

FUNDAMENTALS

* LME copper inventories <MCUSTX-TOTAL> fell to 95,525 tonnes, their lowest since July 2006, pushing the tom-next spread <MCUT-0=LX> to a $10-a-tonne premium, a level unseen since December, indicating tight nearby supplies.

* A tailwind for zinc demand from booming Chinese steel production has pushed prices of the galvanising metal to their highest in more than nine months, yet data such as warehouse stock levels suggest further significant gains are unlikely.

* China will maintain a “normal” monetary policy, a senior central bank official said on Tuesday, as Beijing holds off on more easing as its post-Covid-19 economic recovery gathered pace.

* LME nickel rose 0.5 per cent to $15,055 a tonne while ShFE nickel jumped 1.6 per cent to 119,140 yuan a tonne.

($1 = 6.9034 yuan )

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Published on August 26, 2020
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