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The most-traded December contract on the SHFE was at 46,930 yuan ($6,591) per tonne as at 10.33am Shanghai time, up by 230 yuan per tonne – or 0.5% – from Thursday’s close of 46,700 yuan per tonne.
Red metal prices rose amid fresh optimism that a partial trade deal between the US and China could be agreed upon, after reports emerged overnight that US President Donald Trump will meet with Vice Premier Liu He, China’s lead trade negotiator, in Washington on Friday.
“We’re doing very well […] We’re going to see them tomorrow, right here, and it’s going very well,” President Trump told reporters outside the White House on Thursday.
“Investors are starting to believe there is light at the end of the trade-war tunnel,” Stephen Innes, Asia-Pacific market strategist at AxiTrader, said in a morning note.
This renewed positivity has resulted in a degree of risk-on returning to the market, but investors will likely remain wary in the absence of any concrete developments in trade negotiations, preferring to wait and see.
This is proving to be the case for the rest of the SHFE base metals, which were broadly down this morning. With the exception of the most-traded November zinc contract (+0.4%), the base metals’ most-traded contracts were down by around 0.4%.
The more positive performance by copper relative to its peers also comes amid an improvement in the red metal’s fundamentals.
Fastmarkets’ Chinese copper consumption index (derived from activity data from the major downstream sectors consuming the red metal) improved in the third quarter of the year, after some weakness in the second quarter. The index recovered to -13 in August from -25 in June, according to Fastmarkets’ analyst Boris Mikanikrezai.
“…We continue to believe that refined market conditions should tighten markedly in the four quarter of the year, principally thanks to an acceleration in Chinese refined copper consumption, which should therefore result in renewed outflows from visible inventories…we think that copper prices are likely to perform well in the near term, ” Mikanikrezai added.
On the supply side, Shanghai-bonded copper stocks fell to a four-year low of 292,000-295,000 tonnes at the start of October, according to Fastmarkets’ latest assessment, with the low attributed to increased demand amid the traditional busy season and restocking ahead of China’s National Day holiday (October 1-7). Other highlights