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Copper Ends The Week 2% Higher; Rises on U.S. jobs growth, China tariff rollback

7 Dec 2019 9:06 am
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Mumbai (Commodities Control) - Copper prices rose sharply on Friday after data unexpectedly showed U.S. employment rose at the fastest rate in 10 months in November, suggested the economy was not in danger of stalling.

The numbers caused a rally in global equities and came after China said it would waive import tariffs on some U.S. goods, raising hopes that an economically damaging trade dispute may ease.

Benchmark copper on the London Metal Exchange (LME) ended up 1.7% at $5,990 a tonne, its biggest one-day gain since Sept. 17. It was up around 2% for the week.

However, copper is nearly 20% from highs in June 2018, with investors nervous about trade barriers and weak demand for commodities.

On-warrant stocks of LME copper were down 200 tonnes at 113,400 tonnes, the lowest since March 14.

Copper inventories in warehouses monitored by the Shanghai Futures Exchange were market at 61,495 tonnes, down 6.3 percent from last Friday, the exchange said on Friday.

The discount of LME cash copper to the three-month contract was at $28 a tonne, near its highest since mid-October, pointing to tighter nearby supply.

Brokers estimates the net speculative long position in Comex copper at 1.9% of open interest, or 3,900 lots. Positioning has ranged this year from a long of 52,000 lots in March to a short of 36,000 lots in May.

According to Commodity strategists, the week made good progress on the trade front, but the risk continues to run high.

On the trade front, White House economic adviser Larry Kudlow said a Dec. 15 deadline was still in place for a new round of U.S. tariffs set to kick in on Chinese goods, but that U.S. President Donald Trump likes where talks with China are going.

Trump said on Thursday trade negotiations were "moving right along".

Although, Germany's industrial output dropped unexpectedly in October, reviving worries about its economic growth outlook.

Meanwhile, the most metals managed a positive close. LME aluminium closed up 1% at $1,765 a tonne, zinc ended 0.2% higher at $2,238, and nickel gained 1.5% to $13,475 and tin rose 1.6% to $17,075. Lead bucked the trend, falling 0.7% to $1,892 a tonne.

Indonesia expects to have total annual nickel capacity of nearly 70 million tonnes by 2022, compared with a November projection of 91 million tonnes in 2021.

(By Commoditiescontrol Bureau: +91-22-40015502)

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