By Mai Nguyen
SINGAPORE, May 19 (Reuters) - London copper prices gained on Tuesday after encouraging data from a potential COVID-19 vaccine lifted hopes of a faster recovery in the global economy hurt by the pandemic, although gains were capped on renewed Sino-U.S. tensions.
“Metals are trading in tandem with the S&P 500 and currencies, mainly the yuan vs the U.S. dollar. (Also) supporting markets are hopes that we will soon have a vaccine,” said commodities broker Anna Stablum of Marex Spectron.
Very early data showed that Moderna Inc’s experimental vaccine produced protective antibodies in a small group of healthy volunteers.
Three-month copper on the London Metal Exchange (LME) was up 0.6% at $5,350.50 a tonne, as of 0709 GMT.
Earlier in the session, the metal had gained 1.1% to its highest since March 16.
The most-traded copper contract on the Shanghai Futures Exchange closed up 1.8% to 43,690 yuan ($6,148.50) a tonne, having eased from a one-month high of 44,030 yuan a tonne hit earlier in the session.
“Metals have trimmed earlier gains as equities and the yuan are falling back. President Trump is escalating threats towards the WHO (World Health Organization), indirectly increasing tensions with China,” Stablum said.
Sino-U.S. trade relations have turned sour following Washington’s disappointment over the way China handled the novel coronavirus outbreak, raising fears that the countries could engage escalate their spat and hurt economic growth further.
Trump called the WHO a “puppet of China” and denounced an “apparent attempt to conceal this outbreak by at least one member state”.
* CHINA STIMULUS: Prices of metals were also supported by market expectations that China, the world’s biggest metals consumer, could announce more stimulus measures at a key parliament meeting later this week.
* OTHER PRICES: LME nickel advanced 0.7% to $12,340 a tonne, while zinc fell 0.5% to $2,014.50 a tonne. In Shanghai, aluminium hit a 2-1/2-month high of 12,980 yuan a tonne before easing to close up 1.3% at 12,850 yuan a tonne, while nickel jumped 3% to 102,080 yuan a tonne.
* EU: France and Germany proposed a 500-billion-euro ($545.65 billion) Recovery Fund for European Union regions and sectors hit hardest by the pandemic.
* For the top stories in metals and other news, click or ($1 = 7.1058 yuan) (Reporting by Mai Nguyen; Editing by Subhranshu Sahu, Sherry Jacob-Phillips and Uttaresh.V)