METALS-Copper, aluminium touch fresh highs on hopes for demand, tariff deals

By Eric Onstad

LONDON, July 22 (Reuters) - Copper prices touched their highest in more than two weeks while aluminium jumped to a four-month peak on Tuesday, buoyed by hopes for firmer Chinese demand and deals with the U.S. on tariffs.

The three-month copper contract CMCU3 on the London Metal Exchange added 0.5% to $9,910 a metric ton by 1620 GMT, its highest since July 4.

"The Chinese government's working plans to stabilise industrial growth and the launch of the giant Tibet hydropower plant are all positive signals to the metals market," a Beijing-based futures analyst said.

U.S. Comex copper futures HGc3 added 1.2% to $5.71 a lb, bringing the premium of Comex over LME copper to $2,673 a ton.

Investors were also hopeful after U.S. Treasury Secretary Scott Bessent said he will meet his Chinese counterpart next week in Stockholm, and discuss what is likely to be an extension of an August 12 deadline for a deal to avert sharply higher tariffs.

On the Shanghai Futures Exchange aluminium prices hit their highest since November, with the most active contract SAFcv1 rising 0.75% to 20,900 yuan ($2,913.26) a ton.

"Aluminium fundamentals are the most solid among metals in China," a Shanghai-based metals analyst at a futures company said.

LME aluminium CMAL3 also hit a fresh high, rising 0.2% to $2,652.50 a ton, having touched its strongest since March 21 at $2,660.

At least one analyst, however, was wary about the gains.

"There are a lot of reasons to be cautious for the month ahead. We might see a pullback in terms of the base metals," said Dan Smith, managing director at Commodity Market Analytics.

"I think the next month or two could be pretty interesting with all this pressure on the Federal Reserve to cut rates, but actually inflationary pressure is potentially building in the U.S."

The period until September is also a seasonally weak period for demand, Smith added.

Among other metals, zinc CMZN3 advanced 0.6% to $2,854, nickel CMNI3 edged up 0.1% to $15,530, tin CMSN3 added 0.1% to $33,850 while lead CMPB3 dipped 0.2% to $2,010.50.

For the top stories in metals, click TOP/MTL

($1 = 7.1741 Chinese yuan)

 For related news and prices, click on the codes in brackets: LME price overview      RING= COMEX copper futures  0#HG: All metals news         MTL   All commodities news      C 
 Foreign exchange rates FX=SPEED GUIDES LME/INDEX