Copper edges up on tighter nearby supply, focus on US-China trade talks

Copper prices edged up in London on Friday, supported by a weaker dollar and tighter nearby supply, reflected in the premium for nearby copper contracts against those further along the maturity hitting a two-and-a-half-year high.

Benchmark three-month copper on the London Metal Exchange (LME) rose 0.1% to $9,443 a metric ton by 0955 GMT.

U.S. President Donald Trump said on Thursday he expects there to be substantive negotiations between the United States and China on trade this weekend and predicted that punitive U.S. tariffs on Beijing of 145% would likely come down.

“The talks provide potential for the de-escalation but we don’t have strong opinions on what can be achieved in the short-term. The sooner they can de-escalate, the better,” said Ben Davis, head of European metals and mining research at RBC Capital Markets.

Trade tariffs pose long-term risks to global demand for metals that rely on economic growth.

However, the U.S.-China trade conflict and a probe into copper in the U.S. are reducing the short-term availability of the red metal on the Shanghai Futures Exchange (SHFE) and within the LME system by attracting more copper into the COMEX-owned warehouses.

Copper buoyed by softer dollar, focus on tariff tensions

Copper inventories in SHFE-monitored warehouses fell 9.6% this week. These stocks are down 70% since end-February, deepening the premium of SHFE June copper contracts over the October ones.

On the LME, the spread between the cash LME and the three-month copper contract ended Thursday at a premium of $46 a ton, the highest since November 2022. It swung from a discount of $63 in early April as stocks in the LME-registered warehouses continue to see outflows.

Indicating robust import demand in top metals consumer China, the Yangshan copper premium is at $102 per ton, the highest since December 2023.

“Consumers in China seem to be confident that their government is going to step in with stimulus to mitigate the tariff impact,” said Davis.

China’s copper concentrate imports reached a record high in April amid steady imports of unwrought copper and copper products.

LME aluminium rose 0.6% to $2,428 a ton, zinc rose 1.1% to $2,647.5, lead added 1.6% to $1,975.5, and nickel was up 1.1% to $15,705, while tin rose 0.1% to $31,760.