Copper under pressure as US readies more tariffs

MELBOURNE — London copper fell on Monday in light trade after US President Donald Trump threatened to ratchet up trade tariffs on China, raising concerns about weaker demand growth for metals.

In August, China’s trade surplus with the United States widened to a record even as the country’s export growth slowed slightly, an outcome that could push Mr. Trump to turn up the heat on Beijing in their cantankerous trade dispute.

“The markets once again are drifting with the usual fears of trade wars,” said broker Kingdom Futures in a report.

China’s producer inflation cooled in August amid softening domestic demand, pointing to a steadily slowing growth in the world’s second-biggest economy and largest copper user.

London Metal Exchange copper fell by 1% to $5,872.50 a ton by 0453 GMT, after closing mostly flat in the previous session. Prices struck $5,773 a ton on Aug. 15, the lowest since June 2017. Shanghai Futures Exchange copper traded unchanged at 47,680 yuan ($6,963) a ton.

Mr. Trump warned on Friday he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267 billion of goods on top of $200 billion in imports primed for levies in coming days.

The dollar steadied against a basket of major currencies on Monday thanks to strong US August jobs data and amid fears of a possible escalation in the ChinaUS trade conflict. China’s imports of copper fell 6.7% from a month ago to 420,000 tons in August, data from the General Administration of Customs showed.

China exported 517,000 tons of unwrought aluminum and aluminum products, including primary, alloy and semi-finished aluminum products, in August, up from July’s 510,000 tons.

Hedge funds and money managers increased their netshort positions in COMEX copper contracts in the holiday-shortened week to Sept. 4, US Commodity Futures Trading Commission data showed on Friday.

Zinc premiums jumped $10 to $190 per ton to $210 per ton amid a shortfall of supply in China’s domestic market.

Asian shares started the week in the red on Monday, faltering for the eighth straight day and the dollar climbed against major currencies after US President Donald Trump raised the stakes in the trade row with China. —