SINGAPORE-Majority of industrial metals increased in prices on Monday as China and US trade deal optimism reemerged after weeks of market anxiety.
The signing of ‘phase one’ could happen by the end of this year, a senior US official said over the weekend after Chinese President Xi Jinping and US President Donald Trump disclosed willingness on signing the deal last Friday.
The months-long trade truce between the world’s biggest economies has been dragging base metals, so a resolution to the dispute is set to negate further damages and boost prices.
At 0453 GMT, three-month copper on the London Metal Exchange (LME) soared with 0.3% at $5,869.50 per tonne. Such performance extended gains from the last session as the most-traded copper contract on the Shanghai Futures Exchange (ShFE) inched 0.5% higher to $47,110 yuan per tonne.
The said gains were enforced by strong data from the United States, where manufacturing output boosted this month to its most rapid pace in seven months. In line, services activity beat expectations.
However, metal prices were rounded off from acquiring higher gains as uncertainty over the signing of trade pact still lurks.
A ‘phase two’ is less likely to happen as two countries struggle to close the ‘phase one’, according to officials, legislatives, and trade veterans.
“Despite both sides making progress on a ‘phase one’ deal, a ‘phase two’ deal will likely remain off the cards in our view, due to structural disagreements on key issues,” said Fitch Solutions in a note.
“We believe it is far more likely that the trade war re-accelerates some time next year, rather than continues to steadily de-escalate,” Fitch Solutions added.
On London Metal Exchanges, aluminium price soared with 0.1% to $1,740.50 per tonne, nickel plummeted with 0.3% to $14,590, zinc inched higher with 0.6% to $2,318.50, and lead increased with 0.3% to 15,560 per tonne.
On Shanghai Futures Exchange, aluminium sunk down with 0.2 to 13,815 yuan a tonne, nickel inched higher with 0.3% to 114,420 yuan a tonne, zinc increased with 0.1% to 18,085 yuan per tonne and lead edged up 0.3% to 15,560 yuan per tonne.