Copper prices touched one-week highs on Tuesday as investors bought on expectations the escalating trade dispute between China and the United States would not undermine flows of metal. Benchmark copper on the London Metal Exchange ended up 1.2 percent at $6,796 a tonne from an earlier high at $6,828.
China on Sunday announced tariffs on $3 billion in imports of US food and other goods in response to US tariffs on imports of aluminium and steel. "China's response wasn't as aggressive as some investors were thinking," said Commerzbank analyst Eugen Weinberg.
Traders expect higher inventories of copper, up 20 percent at 383,025 tonnes since March 22, in LME approved warehouses to cap price gains. Upside resistance for copper prices is at $6,830, near the 21-day moving average. Support is at $6,700, near the 200-day moving average.
Concern about the nearby availability of zinc on the LME market due to one company holding between 50 and 79 percent of warrants has created a premium of $12 a tonne for the cash contract over the three-month forward. Three-month zinc gained 0.2 percent to $3,280. Prices rose 1.3 percent at $13,475 from an earlier two-week high at $13,660. Nickel's gains have been fuelled by falling stocks in warehouses monitored by the Shanghai Futures Exchange (ShFE).
A break of key resistance at $13,450, where the 21-day and 55-day moving averages met, triggered a flurry of nickel buying by funds. Prices ended 1.3 percent lower at $1,978, their lowest since August last year, partly due to record high stocks above 970,000 tonnes in ShFE warehouses.
Lead fell 0.2 percent to $2,391.5 a tonne and tin was untraded at the close, but bid up 0.4 percent to $21,150.
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