Copper prices were steady on Friday ahead of a meeting of G20 leaders but recorded their worst quarterly performance since 2015 due to the protracted US-China trade dispute which has undermined growth and demand.
Benchmark copper on the London Metal Exchange was down 0.1 per cent at $US5,993 a tonne at close.
Prices of the metal, used widely in the power and construction industries, are down 7.4 per cent this quarter.
“It’s all very tricky at the moment with the trade war, but Chinese stimulus should help demand for base metals in the second half,” said Liberum analyst Ben Davis.
“The trade war is the single biggest factor. No one has any idea when it’s going to end and how,” said Guy Wolf of Marex Spectron, adding that uncertainty was holding back economic activity and investment.
Support for base metals comes from a lower US currency, which makes US-dollar-denominated commodities cheaper for importers in other currencies.
This is a relationship used by funds to generate buy and sell signals from numerical models.
Earlier this month Chinese authorities said they would allow local governments to use proceeds from special bonds as capital for major investment projects, in a bid to support the slowing economy.
Chinese copper buyers are hunting for alternative sources of the metal as beefed up restrictions on imports of high-grade copper scrap kick in on Monday in the world’s top consumer.
The copper market is waiting to see the fallout, if any, for output after the death of 34 small-scale miners at a mine owned by Glencore in the Democratic Republic of Congo.
Chile’s Codelco, the world’s top copper miner, told Reuters on Friday that its Chuquicamata copper mine was fully operational following a two-week long strike, easing supply concerns.
The premium for cash zinc over the three-month contractnarrowed to $US78 a tonne on Thursday, the lowest since April 9.
Concerns about nearby supply on the LME market sent the premium to $US161 a tonne in May, the highest since September 1997.
“Rising supply of zinc concentrate and higher exchange stocks have been improving the metal’s availability in the physical market,” analysts at ING said.
Zinc stocks in LME-approved warehouses fell below 50,000 tonnes in May to their lowest since the early 1990s.
They now stand at 97,000 tonnes.
Aluminium rose 0.5 per cent to $US1,799, zinc rose 0.8 per cent to $US2,494, lead fell 0.4 per cent to $US1,932, tin eased 0.1 per cent to $US18,825 and nickel ended 0.2 per cent lower at $US12,690 a tonne.