What happened to base metals this week? Here’s a look at the top stories covered by the Investing News Network.
Base metals edged up on Friday (December 20) as US-China trade tensions eased.
Earlier this week, China’s commerce ministry said the Asian country and the US are in touch over signing a phase one trade deal following almost two years of negotiations.
“Most metal prices have received a boost so far in December, largely on the back of more positive trade war rhetoric as well as improving macroeconomic data coming from China and the US,” Fitch Solutions said in a note.
As a result of the trade deal news, investors’ risk appetite increased, with most base metals seeing gains by the end of the five day period.
Copper started the week trading at US$6,155 per metric ton and took a dip on Wednesday (December 18). By Friday the red metal had rebounded to end the week almost flat at US$6,160.
Also supporting prices for copper is an optimistic demand outlook in China after the country’s factory activity showed signs of improvement in November.
“Chinese commodity demand strengthened notably in November, driven by solid construction activities as evident in the steady draws of domestic steel, copper and aluminum inventories,” Citi (NYSE:C) analysts said in a note.
Zinc prices performed in an uptrend from Monday (December 16) to Friday, finishing the five day period at US$2,323 per metric ton.
According to the International Lead and Zinc Study Group, the base metal, which is used to galvanize steel, recorded a global deficit of 152,000 metric tons from January to October.
For its part, nickel bounced back after falling on Thursday (December 19) to end the week at US$14,030 per metric ton.
Looking over to lead’s performance this week, oversupply worries surged after news that China’s lead production hit a record high of 572,000 metric tons in November, up 15.1 percent year-on-year.
Despite this, lead prices on the London Metal Exchange ended the week up at US$1,896 per metric ton.
Meanwhile, iron ore prices were at US$92.1 per metric ton on Monday, but had edged down by Friday to reach US$91.74.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.