Copper prices were set for their eighth straight weekly fall after trade disputes, signs of slowing global economic growth and disappointing US jobs data weakened the demand outlook for metals. Benchmark copper on the London Metal Exchange (LME) traded down 0.2% at $5,799 a tonne in closing rings, down 0.5% this week. Copper has fallen by about 14% from an April high of $6,608.50 after hopes of a quick US-China trade deal faded and US President Donald Trump threatened tariffs on Mexican goods.
A run of poor economic data continued on Friday with figures showing a sharp slowdown in US jobs growth. An increase in risk appetite among investors this week has lifted global stock markets from recent lows and helped to support copper prices, said Saxo Bank analyst Ole Hansen. "But we are not out of the woods yet," he said. "We need to see data reducing recession fears or implying lower supply (of copper). Until we see that, copper is likely to struggle."
Volumes were subdued, with Chinese markets closed for the Dragon Boat Festival. President Trump said he would decide whether to impose tariffs on at least $300 billion of Chinese goods after a meeting of G20 nations later this month. Washington has, however, granted Chinese exporters two more weeks before imposing a set of previously announced tariffs. US-Mexico talks were set to resume on Friday as Mexican officials push to avert US tariffs due to take effect next week.
China, the largest consumer of metals, announced measures to revive slumping car sales. The governor of its central bank said there was "tremendous" room to make adjustments if the China-US trade war worsens. Industrial output and exports fell sharply in April. The dollar was heading for its biggest weekly fall since February 2018, helping metals by making them cheaper for buyers with other currencies.
Speculators' net short position in LME copper has expanded to 9.8% of active contracts - the largest since September, according to broker Marex Spectron. Unions at Chile's huge Chuquicamata copper mine agreed to extend negotiations with operator Codelco in the hope of averting a strike. LME lead closed down 3.1% at $1,832 a tonne but was up about 1.5% on the week after a major smelter halted production and declared force majeure.
The premium for cash lead over the three-month contract fell to $11 from a more than two-year high of $39 earlier this week. A premium suggests tight nearby supply. LME aluminium finished down 0.7% at $1,764 a tonne, zinc closed 0.7% lower at $2,484 and tin slipped 0.1% to $19,225. Nickel was not included in closing rings but was down 0.5% at $11,620 in electronic trading. All but tin were down this week.