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Copper slips as Italy crisis, US-China trade row feed risk aversion

Copper slips as Italy crisis, US-China trade row feed risk aversionLONDON: Copper fell to a three-week low on Wednesday as a retreat in stock markets on worries over political turmoil in Italy kept up pressure on cyclical assets, offsetting a weaker dollar.

Concerns over the prospect of a US-China trade war also simmered, weighing on appetite for stocks and industrial metals.

China warned on Wednesday that it was ready to fight back if Washington was looking for a trade war. That came after the United States, in a change of tone, said it still held the threat of imposing tariffs on $50 billion of imports from China.

Given those pressures, copper is sliding towards the bottom of its recent range, Saxo Bank’s head of commodity strategy Ole Hansen said.

“The US-China trade spat seems to be hotting up again after yesterday’s announcement from the White House,” he said. “The global growth and demand outlook does not need a new political/financial crisis in Europe and a potential trade war between the world’s two biggest economies.”

* COPPER PRICES: Three-month copper on the London Metal Exchange was down 0.6 percent at $6,815 a tonne in official trading, having earlier touched $6,727, its weakest since May 8.

* FINANCIAL MARKETS: Italy’s political crisis and renewed trade war fears sent world stocks lower for the sixth day in a row on Wednesday.

* COPPER INVENTORIES: On-warrant copper stocks in London Metal Exchange warehouses – representing metal not earmarked for delivery – eased to 191,200 tonnes, data showed on Wednesday. That was the lowest level since January.

* INDIA SMELTER: Vedanta Resources is working on a legal challenge to an Indian state’s closure of one of its copper smelters but will not proceed until tensions have eased over the deaths of 13 people during protests last week.

* TARIFFS: European Union Trade Commissioner Cecilia Malmstrom said she would seek a full exemption from new US steel and aluminium tariffs when she meets her US counterparts on Wednesday.

* ALUMINIUM: LME aluminium was 0.1 percent lower at $2,272 a tonne in official trading.

* ZINC STOCKS: On-warrant zinc stocks in LME warehouses eased to 195,225 tonnes, their lowest in a month. The proportion of cancelled warrants – metal earmarked for delivery and therefore not available to the market – rose to nearly 15 percent from 6 percent last week.

* ZINC SPREADS: Cash zinc held in a 25 cent premium over the three-month contract, versus a discount of $6.50 a tonne a week ago, indicating near-term market tightness.

* ZINC PRICES: LME zinc was untraded in official rings, but was last bid up 0.7 percent at $3,110 a tonne.

* OTHER METALS: LME lead was 0.5 percent lower in official trading at $2,433 a tonne, while tin was down 0.1 percent at $20,405. Nickel, also untraded in official rings, was last bid at $14,910, little changed from Tuesday’s close.

Copyright Reuters, 2018
 

Source: Brecorder

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