Copper supplies to remain relatively tight 

Base metals grew after a series of tumbling sessions with the progress in US-China trade talks. The two countries are expected to get a deal where a portion of the $250 billion US tariffs on Chinese goods may be rolled back. 

The US Treasury Secretary Steven Mnuchin wrote about the productive talks between the two countries. China announced a stimulus for small and medium firms, saying it will relax residency curbs in smaller cities. 

April and May are the top consumption season for metal copper, where the Air conditioning sector is the biggest consumer and is expected to grow by 7.9 per cent in the month. 

There are many challenges in the industrial metal sector. Still, the industry expects to increase the production of electric vehicles, which use double the amount of copper compared to internal combustion engines, and to meet the green targets, most automakers want to produce all-electric fleets.  

Many investors, regulators, and analysts are gathering at the annual World Copper Conference in the Chilean capital of Santiago to discuss it. The investors believe it is a tight market, deficient in supply; hence, it has been an upbeat commodity. 

Previous Trends for Copper

The metal was at a months low in January, where it climbed to the nine-month peak in mid-April. The stimulus by the Chinese government has been beneficial for base metals like copper, which the analysts have a positive outlook towards, as it is a deficit in the current year of 205,500 tonnes. 

It is believed the global mine output may not increase in the second half of the year, and China's mine output may remain stagnant, which can lead to supply disruptions. 

In last week's trading session, industrial metals gained almost 6 per cent over US-China trade agreements, and the speculation of recovery in the Chinese economy supported growth. 

Experts believe copper will continue to gain due to the lack of new supplies and increased demand. It is widely used in the construction and power sector, and currently, the market is slightly deficient in it. 

The industry is changing strategies where it might bring new supplies online, although it may take time. Miners BHP, Freeport, and Nevada Copper Corps are investing over 1.1 billion to develop fresh copper projects in the US. 

It is a metal that the increase in the use of EVs and low-emission automobiles will most benefit. 

Other industrial metals like Zinc, the second-best performer year-to-date, posted gains of 14 per cent, although the gains can be weighed down by the rise in supplies in the current year. 

The higher shortage in aluminium will lead to an increase in price, but economic factors like slowing growth can pressure high-cost metal processors. In the case of aluminium, the trade experts expect the price to recover to trade at an average of $1,984 a tonne in Q3.