By Mai Nguyen
SINGAPORE, June 1 (Reuters) - Copper prices rose on Monday on solid manufacturing data from China and a milder-than-expected response by the U.S. President Donald Trump on China’s security legislation for Hong Kong.
Trump on Friday ordered the process of eliminating special U.S. treatment for Hong Kong but did not undermine the U.S.-China Phase 1 trade deal. Markets had feared any tariff row would further deteriorate the global economy and metals demand.
“Trump’s sanction against China seems to be no big deal,” said a metals trader.
Meanwhile, a private business survey showed China’s factory activity unexpectedly returned to growth in May, while a similar survey for bigger Chinese firms showed more activity in the services and construction sectors.
However, both surveys showed export orders shrank, dampening outlook for metals consumption in manufacturing.
“There are still challenges and downside risks ahead from external factors. That said, with Chinese government readiness to protect its economy ... downside risks to the Chinese economy will be largely minimised,” said analyst Helen Lau of Argonaut Securities in a note.
Three-month copper on the London Metal Exchange up 1.3% at $5,444.50 a tonne as of 0702 GMT, while the most-traded July copper contract on the Shanghai Futures Exchange jumped 1.8% to 44,600 yuan ($6,264.84) a tonne.
* OTHER PRICES: LME nickel rose 2.3% to $12,605 a tonne while ShFE nickel rallied 2.8% to 103,250 yuan a tonne and ShFE lead advanced 2.5% to 14,550 yuan a tonne.
* CHILE COPPER: Chile produced 474,880 tonnes copper in April, up 2.8% year on year, despite restrictions to tame the coronavirus outbreak.
* CHINA PMI: China’s factory activity grew at a slower pace in May but momentum in the services and construction sectors quickened.
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$1 = 7.1191 yuan Reporting by Mai Nguyen; Editing by Rashmi Aich and Vinay Dwivedi