Shanghai zinc jumped more than 3
per cent to the highest in more than two weeks on Friday amid sliding
stockpiles in London and signs that China may be taking steps to de-escalate
its trade dispute with the United States.
China has delivered a written
response to US demands for wide-ranging trade reforms ahead of expected talks
between US President Donald Trump and Chinese President Xi Jinping on the
sidelines of a G20 summit in Argentina later this month.
“Trade tension has been weighing
on the base metals sector for the past six months, so this latest move
represents some hope that there is light at the end of the tunnel,” ANZ
analysts said in a note.
The most-traded January zinc
contract on the Shanghai Futures Exchange rose as much as 3.3 per cent to
21,645 yuan a tonne, its loftiest since October 30. It was up 3 per cent at
21,580 yuan by 0155 GMT. The gains followed a 3 per cent overnight rally in
zinc on the London Metal Exchange. LME zinc was last trading at $2,593 a tonne,
up 0.7 per cent.
LME zinc stocks fell to a
decade-low of 125,400 tonnes, data showed, while on-warrant or available stocks
hit their lowest since February. Global zinc market deficit narrowed to 54,700
tonnes in September from a revised deficit of 81,800 tonnes in August, data
from the International Lead and Zinc Study Group showed on Wednesday.
Copper treatment and refining
charges
Chinese copper smelter Jiangxi
Copper and miner Antofagasta have agreed 2019 copper treatment and refining
charges (TC/RCs) at $80.80 a tonne and 8.08 cents a pound, three sources
familiar with the matter said. The refining charges agreed between Jiangxi and
Antofagasta, the first major deal for 2019 which typically sets the benchmark
for the sector, are down from the 2018 benchmark of $82.25 a tonne and 8.225
cents a pound.
“The concluded annual TC/RC for
2019 reflects a much better supply and demand fundamentals globally. We expect
copper prices to be well supported by the recent developments and outlook,”
Argonaut Securities said in a note.
Chile's state copper agency
Cochilco had lowered its average copper price prediction for this year by $0.03
to $2.97 per pound on Thursday in its second negative projection in six months.
Copper rose 0.2 per cent to $6,194.50 a tonne in London and climbed 0.8 per
cent to 49,560 yuan in Shanghai .
Pound hits 2-year low
The British pound suffered its
biggest one-day loss against the euro since October 2016 after a bout of
political turmoil fanned fears the country could crash out of the European
Union without a divorce deal. Hopes for a thaw in Sino-US trade relations
boosted Asian equities.
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