Base metals down

- Advertisement -

BENGALURU- Most base metals in London dipped on Monday, with copper hitting its lowest in four weeks, as US President Donald Trump’s 10 percent tariff on imports from top metals consumer China fueled trade war concerns and added uncertainty to the market.

Benchmark copper was down 1.3 percent at $8,927.5 a metric ton, hitting its lowest since Jan. 6.

The dollar index hit its highest in three weeks, making greenback-priced commodities more expensive for holders of other currencies.

- Advertisement -

Trump on Saturday imposed 25 percent tariffs on Mexican and most Canadian imports and 10 percent on goods from China, starting on Tuesday. White House officials said there would be no exclusions from the tariffs.

China said it would challenge Trump’s move at the World Trade Organization and take other countermeasures, while Canada and Mexico immediately vowed retaliatory measures.

“Base metals are highly dependent on growth factors, and trade tensions create a negative feedback loop on global growth,” said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.

“The market is anticipating retaliatory measures, particularly from China, which could further impact metal prices negatively.”

More tariffs are coming, Trump said, adding that import taxes were being considered on European goods, as well as on steel, aluminum and copper, and on drugs and semiconductors.

Citi said in a note that they see further tariff escalation as bearish for copper to $8,500 a ton over the next three months, on an ex-US price basis. 

Three-month aluminum fell 1.5 percent to $2,556, easing to its lowest in more than two weeks.

LME zinc fell 1 percent to $2,713.5 a ton, tin eased 1.2 percent to $29,755 and nickel lost 0.5 percent to $15,130, while lead gained 0.1 percent to $1,952

The Shanghai Futures Exchange is closed for the Lunar New Year holiday. Markets will resume trade on Wednesday, Feb. 5.

Author

- Advertisement -
Previous article
Next article

Share post: