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Copper News – Trade, Tariffs and Torrential Downpour

Copper News – Trade, Tariffs and Torrential Downpour

Copper dropped for a fourth straight session in overnight trading mainly on concerns over the U.S.-China trade dispute and slowing global economic growth. The red metal opened for trading this morning at $2.77 a pound.

The Story
U.S. and Chinese officials expressed hope yesterday that a new round of talks would bring them closer to ending the seven-month trade war, but according to Reuters, a U.S. Navy mission through the disputed South China Sea cast a shadow over the negotiations in Beijing.

China was upset yesterday about the mission through the disputed South China Sea. This comes less than a week after President Donald Trump said he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline for a trade deal. President Trump has said he could follow through on his threat to increase tariffs on Chinese goods if a deal is struck. Both sides are meeting this week in China’s capital.

The topic of trade talks was overshadowed by economic news as China went back to work after a week off for the Lunar New Year holiday. Chinese investors seemed to focus more on downbeat economic news rather than optimism expressed by China about a new round of trade talks with the United States. We will see how the markets react as China gets back up to speed after the holiday break.

Tentative Deal on Capitol Hill
Reports out Monday say lawmakers have reached a tentative deal to keep the government running. The Business Insider says the deal includes about a quarter of the amount President Trump was asking for to build a wall along 215 miles of the Southern border. The details still need to be worked out, but the deal apparently sets aside $1.375 billion for border fencing – less than the $5.7 billion Trump had asked for.

Both the House and the Senate must approve it, and it must be signed by President Trump before midnight Friday to avoid another government shutdown.

We will keep an eye on the situation and report here how it impacts the markets, specifically any indication if it will move the needle in the copper industry.

Other Copper News
There was further pressure on copper prices after Chilean state miner Codelco had to stop production at its Chuquicamata copper mine. The mine closed after a record-setting deadly downpour closed the mine. Crews were back to work Monday. You can read the entire story here. The same storm hit copper mines in Peru.

Looking Ahead
This week investors will be monitoring U.S. economic data for its impact on the U.S. dollar after concerns over the gloomy global economic outlook to end last week.

Here is a look at the week of significant events likely to affect the markets as compiled by www.investing.com.

Monday, February 11

The U.K. released data on GDP and manufacturing and industrial production.

Tuesday, February 12

Australia is to report on home loans and business confidence.

Japan is to publish preliminary data on machine tool orders.

Bank of England Governor Mark Carney is to speak at an event in London.

Later in the day Fed Chairman Jerome Powell is scheduled to deliver remarks in Mississippi.

Wednesday, February 13

The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish a rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.

The U.K. is to publish inflation figures.

Later in the day, the U.S. is to also publish inflation data.

Thursday, February 14

Japan is to release preliminary data on GDP.

China is to publish its latest trade figures.

The euro zone is to produce revised data on GDP growth and employment change.

The U.S. is to release reports on retail sales, producer prices and jobless claims.

Canada is to report on manufacturing sales.

Friday, February 15

China is to release data on inflation.

The U.K. is to report its latest retail sales figures.

The U.S. is to round up the week with the Empire State manufacturing index, a report on industrial production and preliminary data on consumer sentiment.

Further Reading

China’s demand for electric vehicles charges copper

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Jim Williams

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