(Updates with closing prices)
By Peter Hobson
LONDON, Nov 27 (Reuters) - Copper prices hit their highest in nearly three weeks on Wednesday, rising for a fourth day after U.S. President Donald Trump said Washington was in the “final throes” of work on a trade deal with China.
Benchmark copper on the London Metal Exchange (LME) closed up 0.4% at $5,945 a tonne after touching $5,968, the highest since Nov. 8.
The metal used in power and construction has fallen around 20% since the United States and China began their trade dispute in summer 2018 and global economic growth began to weaken.
It has been stuck in a range between around $5,600 and $6,100 since May.
Momentum in trade talks and a slight improvement in global factory data should keep prices near the top of that range, said Danske Bank analyst Jens Pedersen.
But a “phase one” trade agreement is unlikely to push prices significantly higher, he said. “What matters is more what happens after that.”
TRADE WAR/MARKETS: Trump’s comment after U.S. and Chinese negotiators spoke by telephone boosted oil prices and lifted world equities to within a whisker of record highs.
CHINA: China, the world’s largest consumer of metals, has brought forward 1 trillion yuan ($142 billion) of the 2020 local government special bonds quota to this year as it seeks to avert a sharper economic slowdown.
However, profits at China’s industrial firms shrank at their fastest pace in eight months in October, reflecting weakening factory activity which has weighed on the outlook for metals demand.
JAPAN: A senior Japanese ruling party official said he believed the government was striving to compile a spending package worth about 10 trillion yen ($92 billion) to support the economy.
U.S.: Economic growth in the United States picked up slightly in the third quarter, rather than slowing as initially reported, data showed.
COPPER STOCKS: Combined copper inventories in LME and Shanghai Futures Exchange (ShFE) warehouses, at around 350,000 tonnes, are at typical levels for this time of year. MCUSTX-TOTAL CU-STX-SGH
But stockpiles in Chinese bonded warehouses, at 243,800 tonnes, are down from near 400,000 tonnes a year ago and the lowest since at least 2013. SMM-CUR-BON
CHINA PREMIUMS: Chinese Yangshan import premiums, at $73, were rising back towards October’s 11-month high of $83. SMM-CUYP-CN
TECHNICALS: Copper held above its 50- and 100-day moving averages this month and is rising towards its technically important 200-day moving average at $6,013.
ZAMBIA COPPER: Zambia’s Konkola Copper Mines (KCM) smelter, which has a capacity of 311,000 tonnes, could restart next week after a delay of around a fortnight, mines minister Richard Masukwa told Reuters.
MUTANDA: Glencore’s Mutanda mine in Democratic Republic of Congo suspended operations prematurely on Monday.
OTHER METALS: LME aluminium ended up 0.6% at $1,764 a tonne, zinc slipped 0.1% to $2,297, lead finished unchanged at $1,943, tin rose 0.5% to $16,400 and nickel fell 1.5% to $14,380.
Reporting by Peter Hobson; Additional reporting by Mai Nguyen; Editing by Jan Harvey and Elaine Hardcastle