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Copper Pares Early Gains on ‘Little Progress’ in US-China Trade Talks

January 15, 2019 at 16:11 by Andrew Moran

Copper futures are paring their early gains on Tuesday after it was reported that negotiators saw “little progress” in US-China trade discussions last week. At the start of the trading session, the industrial metal tried to reverse its declines, stemming from weak Chinese data and officials holding a more bearish outlook on the world’s second-largest economy.

March copper futures rose $0.01, or 0.44%, to $2.64 per pound at 14:37 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. Copper prices had tacked on as much as $0.03 in the earlier part of the trading session before paring those gains. So far this year, the red metal has traded sideways, advancing a tepid 0.13%.

On Monday, the General Administration of Customs reported that total exports fell 1.4% to $221.25 billion and total imports declined 10% to $164.19 billion last month. When compared to the same period in 2017, exports were down 4.4% and imports were down 7.6%. China’s overall trade surplus jumped $57.06 billion, beating market forecasts of $51.6 billion.

It was also discovered that China’s trade surplus with the US spiked to an all-time high of $323.32 billion in 2018, up from $275.81 billion in 2017.

Manufacturing activity also disappointed investors with the purchasing managers’ index (PMI) decreasing for the first time since March 2017.

Base metals and the equities market were affected by comments made by Senator Chuck Grassley (R-IA), who revealed that US Trade Representative Robert Lighthizer told him that there has ostensibly been little progress on important issues in last week’s trade talks. According to the long-time senator, Lighthizer thinks negotiators achieved very little when resolving structural issues and intellectual property protections.

US officials met with their counterparts in Beijing for three days – it was originally scheduled for two days.

Investors fear that if the Chinese economy slows down any further, particularly from the trade spat, then it could send demand for metals even lower than it is today.

In other metal commodities, February gold futures edged up $1.20, or 0.09%, to $1,292.50 per ounce. March silver futures shed $0.025, or 0.16%, to $15.65 an ounce. March platinum futures added $2.30, or 0.29%, to $804.80 an ounce. March palladium futures surged $9.80, or 0.76%, to $1,291.80 per ounce.

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