Copper prices steadied near 14-month lows on Friday but were set for their second consecutive weekly loss as investors braced for new US tariffs on China which could damage economic growth and demand for metals. A public comment period for proposed tariffs on Chinese imports worth $200 billion passed at 0400 GMT. China has warned it would retaliate if they are applied.
Jitters over the tariffs are hitting copper despite positive supply and demand fundamentals, Societe Generale analyst Robin Bhar said. "Everyone is waiting for the tariffs to be applied or not. Rebounds in metals (prices) will simply not get going while you have these macro fears," he said.
Benchmark copper on the London Metal Exchange closed up 0.1 percent at $5,933 a tonne but down 0.7 percent this week and near its August low of $5,773. The US-China trade conflict has helped push copper prices down some 20 percent since early June. China accounts for nearly half of global copper demand estimated at around 24 million tonnes this year.
On-warrant stocks of copper available to the market in LME-registered warehouses rose by 850 tonnes to 147,450 tonnes but are still down from more than 234,000 tonnes in mid-August, signalling a tighter market. Stockpiles in Shanghai Futures Exchange (ShFE) warehouses have fallen to 136,051 tonnes from more than 300,000 tonnes in April.
Treatment and refining charges (TC/RCs) paid to China's copper smelters are set to drop below $80 a tonne next year as processing capacity expands and copper concentrate falls into a deficit. LME Aluminium ended up 1.4 percent at $2,069 a tonne - though down 2.6 percent for the week - after Reuters reported that European customers would avoid deals with Russian producer Rusal, which is under US sanctions, at an industry event next week.
Workers at Alcoa's alumina and bauxite operations in Western Australia voted to continue a strike. Alcoa has said the strike cut production of alumina, used to smelt aluminium, by only about 15,000 tonnes in August. "However, prolonged industrial action will be a concern to many with the market already tight," analysts at ING said. Higher alumina prices could raise the cost of aluminium.
The discount of cash aluminium over the three-month contract rose to the highest since October 2015 at $39. Nickel finished down 0.7 percent at $12,355 a tonne, zinc fell 0.9 percent to $2,420, lead climbed 2.1 percent to $2,078 and tin closed up 1.1 percent at $19,055.