Benchmark copper on the London Metal Exchange traded 0.4% higher at $11,011 per tonne in official rings, having previously reached $11,094 per tonne, its highest level since May 20 last year.
Chinese and U.S. officials have scrapped the framework of a trade deal that President Donald Trump and Chinese leader Xi Jinping are due to decide later this week that would halt tougher U.S. tariffs and Chinese export controls on rare earths.
Metals traders said China’s industrial profits, which grew at the fastest pace in almost two years in September, suggested growth in the biggest consumer of industrial metals could be gaining momentum.
Sentiment in metals markets was helped by a weaker dollar against the yuan, making dollar-priced commodities cheaper for Chinese buyers.
However, Yangshan’s copper premium, a gauge of China’s willingness to import copper, has shrunk to $38 per tonne from $58 per tonne at the end of September and $100 in May, suggesting purchases still need to accelerate. Expectations that the US Federal Reserve will cut interest rates this week are weighing on the dollar and could potentially boost demand for base metals. Elsewhere, the focus was on falling zinc inventories in LME-approved warehouses at 37,050 tonnes, the lowest since March 2023 and down more than 80% since mid-April.
StoneX analyst Natalie Scott-Gray said LME zinc stocks have “fueled real world demand” due to tight supplies globally.
“Units are also being drawn to the US, with concerns that the outcome of the Section 232 investigation into Critical Minerals (launched in April) could result in import tariffs on zinc,” Scott-Gray said.
Supply concerns in the LME market pushed the three-month spot zinc contract premium to a record high of $338.74 per tonne. The latter was about $250 per tonne.
Zinc rose 1% to $3,055 per tonne over three months, aluminum rose 0.6% to $2,876.5, lead rose 0.3% to $2,022, tin rose 1.4% to $36,300 and nickel fell 0.1% to $15,340.
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