The three-month copper price continues to trade at just over $6,000 per tonne after falling by more than 6% this month from a monthly high of $6,443 per tonne on May 1.
Copper volumes traded were thin over the morning period, with just under 5,000 lots exchanging hands by 9.26am London time, while the metal’s cash/three-month spread remains in a supportive contango, recently seen at $24.50 per tonne.
“For the moment the modest rally in metals is on relatively thin volumes and after so many days of falling prices is not unexpected, the question is how long it will last before the next wave of selling comes in,” Kingdom Futures director and chief executive Malcolm Freeman said in his morning report.
“It would seem that the only thing that is currently guaranteed is volatility and that does not look set to stop any time soon,” he added.
Elsewhere, zinc’s three-month price continues to trade below $2,600 per tonne after falling 2.6% at Monday’s close.
Despite a climb of 0.4% this morning amid more than 3,500 lots traded, spot business for the galvanizing metal remains limited, with its cash/three-month spread continuing to trade in a wide backwardation, recently seen at $143 per tonne.
In macro news, escalating trade tensions between the United States and China continue to dominate headlines after China’s retaliatory import duties of 5-25% on 5,140 US products, while US President Donald Trump and Chinese President Xi Jinping are scheduled to meet next month.
- The US dollar index continues to trade in positive territory, recently seen at 97.32.
- In other commodities, Brent crude oil futures continue to trade around $70 per barrel, indicating easing concerns over supply shortages in the market. That said, Iran and Russia have both cut exports in May, prompting concerns for the Organisation of the Petroleum Exporting Countries (OPEC) regarding its upcoming supply-cutting deal in June.
- In EU data this morning, the German final consumer price index (CPI) reading on a month on month basis over the April-May period was flat at 1%, while the wholesale price index (WPI) over the same period improved to 0.6%, from 0.3% the prior month.
- Meanwhile, the German ZEW economic sentiment index is due later, at an expected reading of 5.1.
- From the UK, the average earnings index on a three-month moving average compared with the same period a year earlier fell to 3.2%, from 3.5% previously. The UK unemployment rate for the April-May period improved to 3.8%, from 3.9% in the prior month.
- US data of note due on Tuesday includes the National Federation of Independent Business (NFIB) small business index and import prices.
- In addition, US Federal Open Market Committee members John Williams and Esther George are due to speak.