Copper hits one-week high, shrugs off trade dispute

LONDON, April 3 (Reuters) – Copper prices touched one-week highs on Tuesday as investors bought on expectations the escalating trade dispute between China and the United States would not undermine flows of metal. Benchmark copper on the London Metal Exchange was up 1.5 percent at $6,813 a tonne at 1058 GMT from an earlier $6,828, its highest since Dec. 22. China on Sunday announced tariffs on $3 billion in imports of U.S. food and other goods in response to U.S. tariffs on imports of aluminium and steel. “China’s response wasn’t as aggressive as some investors were thinking,” said Commerzbank analyst Eugen Weinberg. “That suggests the impact on China’s metal imports is unlikely to be dramatic. After the recent price drop investors are seeing some value.” TARIFFS: The U.S. is this week expected to announce tariffs on $50 billion to $60 billion of Chinese imports following an investigation under Section 301 of the 1974 U.S. Trade Act. PROTRACTED: “Over the course of April, we think investors will come to t he conclusion that the trade issue is going to be protracted and complicated and will likely be “defanged” as it plods along,” INTL FCStone analyst Edward Meir said in a note. “Having fired off the initial round of tariffs, both China and the U.S. will now engage in serious talks in an attempt to lower the temperature. As a result, the panic that seems to be hitting the markets every time the trade issue is brought up will likely subside.” STOCKS: Traders expect higher inventories of copper, up 20 percent at 383,025 tonnes since March 22, in LME approved warehouses to cap price gains. TECHNICALS: Upside resistance for copper prices is at $6,830, near the 21-day moving average. Support is at $6,700, near the 200-day moving average. ZINC: Concern about the nearby availability of zinc on the LME market due to one company holding between 50 and 79 percent of warrants has created a premium of $12 a tonne for the cash contract over the three-month forward. Three-month zinc was up 0.4 percent at $3,287 a tonne. NICKEL: Prices were up 2.4 percent at $13,615 a tonne from an earlier two-week high at $13,660. Nickel’s gains have been fuelled by falling stocks in warehouses monitored by the Shanghai Futures Exchange. RESISTANCE: A break of key resistance at $13,450, where the 21-day and 55-day moving averages met, triggered a flurry of fund nickel buying. PRICES: Aluminium was up 1.1 percent at $2,027 a tonne, lead added 0.6 percent to $2,408 and tin gained 1.4 percent to $21,370.