London copper surrendered early gains and fell to a nine-month low on Wednesday, while zinc hit its weakest in a year as investors braced for a trade war between China and the United States.
China’s threatened tariffs on $34 billion of US goods will take effect from the beginning of the day on July 6, a person with knowledge of the plan told Reuters, amid worsening trade tensions between the world’s two largest economies.
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. If a trade war happens, “there will be some serious ramifications on the global economy,” said Meng Jie Wu, an analyst at CRU consultancy in Beijing.
Three-month copper on the London Metal Exchange fell as far as $6,423 a tonne, the lowest since late September, and was down 0.6 per cent at $6,451 by 0734 GMT. On the Shanghai Futures Exchange, the most-traded copper slid 2.4 per cent to close at 50,100 yuan ($7,583.67) per tonne.
LME zinc dropped more than 2 per cent to $2,731.50 a tonne, its weakest since July last year, and nickel hit a seven-week low of $14,185.
China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump’s trade policies at a summit later this month but is facing resistance, European officials said.
Growth in China’s services sector accelerated in June to a four-month high, buoyed by a pickup in new businesses and a sustained increase in employment, a private survey showed.
China’s yuan rose sharply against the dollar, a day after the central bank assured markets it would keep the currency stable amid heightened worries about trade frictions, although stocks remained under pressure.
US authorities have demanded Glencore hand over documents about its business in the Democratic Republic of Congo, Venezuela and Nigeria as part of a corruption probe, sending the mining company’s shares down more than 8 per cent.
Indonesia has extended a temporary operating permit for Freeport McMoRan Inc’s Grasberg project, the world’s second-biggest copper mine, until the end of the month while discussions continue over long-term rights.