Copper edged higher overnight ahead of US-China trade talks this week but reports that Beijing officials were reluctant to agree to a wide-ranging deal tempered hopes for a speedy resolution.
Benchmark copper on the London Metal Exchange (LME) ended 1.4 per cent higher at $US5,720 a tonne.
The metal used in power and construction logged its third straight week of declines last week after soft economic data sparked fears the trade row would hit global economic growth.
Bloomberg reported at the weekend that Chinese officials were signalling increasing reluctance to agree to a broad trade deal pursued by US President Donald Trump.
Officials from the world’s two largest economies will meet in Washington DC on October 10-11.
“It’s hard to be optimistic that a deal could be reached given the pronouncements over the weekend,” said Capital Economics senior commodities economist Caroline Bain.
“We have been here before, where ahead of the talks there is always a lot of optimism but nothing materialises.”
Trump said his administration had a “very good chance” of agreeing a trade deal and White House economic adviser Larry Kudlow said the US team was “open-minded” about the outcome of this week’s talks. .
On-warrant inventories of copper in LME-registered warehouses slipped 675 tonnes to 194,200 tonnes, having grown by 33,000 tonnes last week.
LME copper remained in a deep contango, indicating plentiful supply.
The discount of LME cash copper to the three-month contract was at $US35 a tonne, the biggest discount since August 2018.
Hedge funds and money managers raised their net short positions in COMEX copper by 10,086 contracts to 62,741 in the week to October 1, the US Commodity Futures Trading Commission (CFTC) said on Friday.
The US unemployment rate dropped close to a 50-year low of 3.5 per cent in September, lifting metals prices.
Copper prices have been caught between the balancing influences of falling supply and weakening global demand, especially in biggest user China.
Production by Chile’s state copper miner Codelco rose 9.3 per cent year-on-year to 154,700 tonnes in August.
LME lead rose to its highest since July 2018, at $US2,192 a tonne, with the spread for cash lead over the three-month contract rising to a premium of $US3 a tonne after staying in discount territory for more than three weeks.
Benchmark lead ended 1.3 per cent higher at $US2,189 a tonne.
Aluminium added 1.6 per cent to $US1,746 a tonne, zinc slipped 0.5 per cent higher to $US2,289, tin shed 0.9 per cent to $US16,330 and nickel ended 0.4 per cent lower at $US17,725.