Copper, industrial metals slide on trade row
Temitayo Ayetoto is Businessamlive Reporter.
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June 19, 20182.4K views0 comments
Copper futures fell more than one percent on Tuesday as an escalating trade row between the U.S. and China rippled through most markets including the industrial metals which were impacted directly, according to multiple reports monitored by business a.m.
“China demand-driven commodity futures including iron ore, copper, zinc and aluminium have seen a sharp decline, as the U.S. considers imposing tariffs on an additional $200 billion of Chinese exports to the US,” said Hans Redeker, analyst at Morgan Stanley, in a note.
After Beijing’s retaliation against U.S. planned tariffs on $50 billion worth of Chinese imports, US President Donald Trump asked his trade representative Robert Lighthizer late Monday to identify $200 billion more in Chinese products that could be subject to tariffs of 10 percent.
Trump also threatened to find $200 billion more worth of goods if China tried to retaliate against those additional tariffs.
According to a spokesperson from China’s ministry of commerce, China will have no choice but to take comprehensive measures in response to the US’ trade moves.
In Comex futures trading, July copper fell 1.4 percent to $3.0635 a pound. If these losses hold, the contract will be down nearly 2.6 percent so far in this young week.
On the London Metal Exchange, copper at one point hit a near three-week low at $6,838.50 a metric tonne before improving.
Analysts said copper prices are underpinned by resilient construction and industrial demand in China, especially if its central bank eases monetary policy as some indications show. Labour talks in top producer Chile and the likelihood that miners there will fall short of production are supporting supply.
July platinum (PLN8, -1.70 percent) edged down by 0.4 percent to $880.80 an ounce, while September palladium (PAU8, -2.06) percent changed hands at $976.30 an ounce, down 0.7 percent.
Gold and silver, were so far drawing limited demand tied to the China-US tensions. August gold (GCQ8, -0.17 percent) edged higher Tuesday by 0.1 percent to $1,281.70 an ounce after booking the lowest settlement since December on Monday and producing a roughly 1.9 percent weekly decline on Friday.
Among other goods, iron and rebar are on the US list of Chinese goods that are to be subjected to a 25 percent tariff beginning July 6.
In China, the most-active futures contracts for iron ore and steel have today fallen for a time by 5.5 percent and 3.5 percent, respectively, on Tuesday. Moves were accelerated in part because Chinese market reaction to the latest political developments was delayed because markets were closed Monday for a holiday.
Meanwhile, the US commerce department has determined that Chinese common alloy aluminum sheet products are being sold in the US at less than fair value and will be subject to preliminary anti-dumping duties of 167.16 percent, the Aluminum Association had said on Monday.