By Mai Nguyen
SINGAPORE, June 19 (Reuters) - Shanghai base metals prices rose on Wednesday as hopes grew for a resolution to the prolonged U.S.-China trade war after U.S. President Donald Trump said talks would resume later this month after a recent hiatus.
Prices of base metals, used vastly in industrial and manufacturing sectors, have been hit by the trade spat between the world’s two biggest economies, as investors worried weaker global economic growth would hurt demand for metals.
Trump said on Tuesday he had a phone call with Chinese President Xi Jinping, adding trade talks would resume before his meeting with Xi at the G20 summit in Japan. China also confirmed the meeting of the two leaders.
“The phone call last night boosted the market. The appetite for risk can be higher and that’s good for risky assets like commodities and stocks,” said an analyst based in China.
The most-traded copper contract on the Shanghai Futures Exchange rose as much as 1.6% to a one-week high of 47,040 yuan ($6,811.96) a tonne, while lead hit its highest since May 27 at 16,340 yuan a tonne.
Both contracts later eased as most analysts do not expect a decisive breakthrough in the talks, while investors were cautious ahead of the U.S. Federal Reserve’s policy decision later in the day but expected the Fed would follow the lead of the European Central Bank and open the door to future rate cuts.
Shanghai copper closed up 1.2% and lead ended 0.7% higher. Aluminium rose 0.5%, nickel advanced 1%, zinc was almost flat and tin edged up 0.1%.
* PRICES: Three-month copper on the London Metal Exchange eased 0.1% by 0723 GMT, hovering around a three-week high, while most other metals fell. Aluminium rose 0.1%, zinc was down 0.6% and nickel declined 0.5%.
* CODELCO: Chilean miner Codelco sweetened its contract offer to workers on Tuesday in a bid to defuse rising tensions after miners striking at its giant Chuquicamata copper mine were involved in clashes with police earlier in the day.
* ALUMINIUM: China’s Baoshan Iron and Steel Co Ltd , the country’s largest listed steel producer, will begin test production at an aluminium project in Henan province in mid-2020, said the industrial zone hosting the plant.
* TIANQI LITHIUM: Tianqi Lithium Corp said on Tuesday it would strengthen inspections on its production facilities and equipment after two earthquakes struck its home province of Sichuan in southwest China.
* CHINA YUAN: China’s central bank said it will sell 30 billion yuan worth of yuan-denominated bills in Hong Kong on June 26, a move that is expected to drain liquidity and support the currency ahead of the G20 summit.
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Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
($1 = 6.9055 Chinese yuan)
Reporting by Mai Nguyen; Editing by Subhranshu Sahu