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Copper slips on profit-taking after Friday’s jump

Copper led base metals lower on Monday as investors took profits after the metal used in power and construction touched a two-week high on Friday.

Three-month copper on the London Metal Exchange slipped 1 percent to $6,218 a tonne in official trading, after climbing on Friday to its highest since Oct. 22 at $6,315.

“There are probably some market players taking profits off the table,” Natixis analyst Bernard Dahdah said.

Copper soared on Friday on signs that trade tensions were easing following optimistic comments from the United States and China.

Chinese President Xi Jinping made positive comments on Monday, promising to lower tariffs, broaden market access and import more from overseas. But this failed to impress the market.

“Indeed (President Xi’s) reiteration of plans to further cut taxes, import $30 trillion of goods over the next 15 years, coupled with a distinct lack of details around any further stimulus measures, leaves the market disappointed,” Marex Spectron analyst Alastair Munro said in a note.

CHINA SERVICES: China’s services sector chalked up its slowest growth in over a year last month as the volume of new orders dried up, a private survey showed, suggesting a further loss in economic momentum as a rough 2018 draws to a close.

RUSAL: Russian aluminium giant Rusal has appointed a chief executive, it said on Monday, after reporting a 42 percent jump in third-quarter recurring net profit on the previous quarter as sanctions imposed by Washington were postponed.

STOCKS: On-warrant copper stocks available to the market in LME-approved warehouses edged down to 100,525 tonnes after jumping 78 percent, or 44,950 tonnes on Friday.

SPREADS: In copper, concern about nearby shortages on the LME market have created a premium of $31 a tonne for cash over three-month contracts. This compares with a discount of $47 at the end of October. MCU0-3

“There were stocks delivered last week that some people didn’t expect. We also saw a weaker sentiment last week with prices under pressure, however the news regarding Trump and Xi gave people confidence to believe in the commodity bull side again. So the players buy and borrow in fairly thin conditions,” one trader said.

TRADE TENSIONS: Doubts emerged over an easing in trade tensions after White House economic adviser Larry Kudlow said he was less optimistic than he was previously about reaching a deal with China.

PRICES: Aluminium slipped 0.1 percent to $1,971 per tonne, zinc eased 1.9 percent to $2,502.50, lead fell 0.5 percent to $1,979, tin was bid down 0.2 percent to $19,050 while nickel was bid 1.4 percent lower at $11,760.

Source: Reuters

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