Base metals prices traded on the Shanghai Futures Exchange were all up during Asian morning trading on Monday February 25, with copper and tin outperforming the rest of the complex. The strength in the base metals comes amid a softer US currency; the dollar index, at 96.44 as at 9.48am Shanghai time, is down marginally from its previous close of 96.51 but is far below its recent high of 97.37 reached on February 15. The base metals also continue to benefit from lingering optimism over progress made in the trade talks between China and the United States, with US President Donald Trump confirming over the weekend that he would delay a planned increase on tariffs against Chinese imports because talks between the two sides were making “substantial progress”.

Posting on social media website Twitter, Trump said, “I am pleased to report that the US has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very productive talks, I will be delaying the US increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for [Chinese] President Xi [Jinping] and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for US & China!”

Base metals prices responded positively to the news, with copper and tin leading the pack higher.

The SHFE’s most-traded April copper contract rose to 50,320 yuan ($7,495) per tonne as at 9:48am Shanghai time, up by 0.8% or 400 yuan per tonne from last Friday’s close.

“[Copper] was also supported by another fall in inventories. Withdrawals from [London Metal Exchange] warehouses reached over [36,000 tonnes] on Friday, pushing stocks to their lowest level since 2005. We believe copper is ripe for another rally higher amid strong fundamentals and rising sentiment, as macro risks subside,” Richard Yetsenga, chief economist with ANZ Research, said in a morning note.

Elsewhere, zinc registered a 205-yuan-per-tonne increase from last Friday’s close to 21,885 yuan per tonne recently, but there are concerns over the sustainability of price gains in zinc once supply of the metal becomes looser.

“Zinc should expect a limited rebound, mainly capped by a rise in [supply of] zinc ingot resulting from the resumption of operations at several smelters,” Citic Futures said in a morning note.