Copper prices extended gains overnight, boosted by hopes of a resolution to the protracted trade conflict between the United States and China.
The world’s two largest economies said they had made progress in negotiations to end the damaging dispute, while upbeat manufacturing data from top metals consumer China added to the positive mood.
“We have not seen any real setbacks recently in trade talks and there’s scope for getting a ‘phase one’ deal,” said Danske Bank analyst Jens Pederson.
“We have also been through another round of manufacturing PMIs that is pointing to a moderate recovery rather than further deterioration.”
Benchmark copper on the London Metal Exchange (LME) ended 0.5 per cent higher at $US5,877 a tonne, adding to the previous session’s 1.0 per cent gain.
On Monday, the Chinese foreign ministry said the presidents of China and the United States had been in continuous touch through “various means”.
Antogafasta trimmed its annual production targets by about 10,000 tonnes as anti-government protests in Chile, the world’s top producer, hobbled operations.
Several of the world’s largest miners – including BHP, Anglo American and Glencore – have operations in Chile, the world’s largest copper producer.
LME aluminium gained 1.6 per cent to $US1,815 a tonne, touching its highest since Septe,mber 20.
This added to a gain of 1.8 per cent made on Friday.
Support for aluminium has come from smelter outages in top producer China and warnings of plant closures from Rio Tinto, but it is still the second worst performing metal on the LME this year.
The net speculative short position for LME aluminium is expected to have fallen for a fourth consecutive session on Friday to levels last seen in mid-September, according to Marex Spectron estimates.
China’s September output slipped 1.6 per cent year on year, hit by continuing outages at two smelters.
The world’s biggest producer now faces a struggle to register annual output growth.
Aluminium stocks available to the market in LME registered warehouses fell to 788,475 tonnes, their lowest in more than a month.
LME cash aluminium maintained its premium over the three-month contract – at just above $US4 a tonne – indicating tight nearby supplies.
On Friday, the spread flipped to a premium from a discount for the first time since January.
The European Union argued for the withdrawal of tariffs imposed by US President Donald Trump on metal imports which set duties in 2018 of 25 per cent on incoming steel and 10 per cent on aluminium.
LME nickel ended 2.4 per cent higher at $US16,380 a tonne, zinc rose 0.8 per cent to $US2,539, lead was barely changed at $US2,162 and tin was bid down 0.6 per cent to $US16,425.
AAP
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