Copper, zinc hit new fresh lows amid trade tensions; most other base metals sink

LONDON — Copper and zinc slid to fresh lows on Wednesday as speculators stepped up selling ahead of new trade tariffs on goods from China and the United States which could dampen demand for industrial metals.

Benchmark copper on the London Metal Exchange ( LME) slumped to a low of $ 6,344 a ton, its weakest since August 2017, before paring losses and closing at $ 6,386, amounting to a drop of 1.6%.

LME zinc tumbled 3.2% to finish at $2,700 a ton, the lowest since June Last year.

“(US President Donald) Trump is not fostering global trade,” said Julius Baer analyst Carsten Menke. “There is scrutiny about the export side of the market in terms of copper- containing household goods or electronics being shipped out of China and we believe that will stay with us at least until US midterm elections in November.”

Washington has said it would implement tariffs on $34 billion of Chinese imports on July 6, and Beijing has vowed to retaliate in kind on the same day.

China was ready to act, but would not fire the first shot in a trade war with the US its finance ministry said.

Adding to pressure on copper by highlighting healthy supplies, Indonesia has extended a temporary operating permit for Freeport McMoRan, Inc.’s Grasberg project, the world’s secondbiggest copper mine, until the end of the month.

Growth in China’s services sector accelerated in June to a fourmonth high, buoyed by a pickup in new businesses and a sustained increase in employment, a private survey showed.

Traders are watching a large holding, between 40% and 50% of total zinc inventories on the LME. It has fueled worries about a short- term shortage on the LME market and led to a premium for the cash contract over the three-month, which was at $51 on Wednesday.

Aluminum, was the only LME metal to end in the black, rising 0.40% to end at $2,089 a ton.

It got a boost when China’s top steelmaking city Tangshan ordered companies in the steel, coke and coal- fired power sectors to meet ultra-low emissions targets, the latest effort to curb air pollution.

“Even though this drive’s effect on the aluminum industry remains unclear, some will see it as a positive,” Alastair Munro at broker Marex Spectron said in a note.

Nickel and lead both hit the lowest levels since May. Nickel shed 1.9% to close at $ 14,145 a ton while lead dropped 2.9% to $ 2,322. Tin ended 0.30% weaker at $19,600 after falling to $19,500, the lowest since Dec. 27 last year. —