Markets were closed in the U.S. Monday to honor Memorial Day. Copper opened this morning after seeing prices rebound on Friday from their lowest since January 14 in the previous session, as the U.S. dollar eased. However, the red metal still saw its sixth straight week of losses on a prolonged U.S.-China trade war.
Copper was up 0.3% in early trading in Asia, but the red metal has lost 7% this month. Copper opened just under $2.70 a pound and a shade under $6,000 per ton to start the holiday-shortened week. Click on the chart below for the current copper price.
U.S. President Donald Trump said on Thursday that Huawei could be included in the U.S.-China trade deal after last week banned U.S. firms from doing business with the Chinese company, which is the world’s largest telecoms network gear maker.
“There’s a little bit pullback in Donald Trump’s hostility towards Huawei… It’s negotiable, so there could be a deal,” analyst Helen Lau of Argonaut Securities told Reuters. “That has definitely injected some confidence in the overall market in China,” she said.
“I continue to believe the U.S. and China will eventually agree on a new framework for trade, and the current escalation of the trade dispute is posturing by both sides to achieve an optimal result,” states Andrew Hecht of Seeking Alpha. “President Xi does not want to see an economic meltdown in his country. President Trump must deliver on his promise and move the needle on trade with China before the election. Therefore, both leaders are likely to agree to some concessions to reach a deal that suits their economic and political needs.”
Possible Trade Deal…With Japan
Speaking at a press conference with Prime Minister Shinzo Abe, President Trump said he hoped to announce a trade deal with Japan “probably in August.” Separately, Canada has taken a first step toward ratifying USMCA after the U.S. struck deals on May 17 to lift tariffs on steel and aluminum imports.
The metals market gained some support to end last week as the dollar fell from a two-year high Thursday and was largely unchanged on Friday, on fears that a trade war with China will hurt the U.S. economy more than expected and on expectations of a rate cut.
The dollar rose to a new high on last Thursday but the red metal scaled back to the $2.70 level on Friday as the dollar index slipped to below 97.50 from the new peak.
A weaker dollar makes dollar-denominated metals cheaper to import using other currencies.
Unionized workers at top copper miner Codelco’s Chuquicamata mine voted over the weekend to reject the state miner’s final contract offer, paving the way for a vote to strike this week, union leaders said in a statement.
We will keep an eye on this situation for next week.
Is Copper Ripe for a Rebound?
Tagged with 2019, copper