SINGAPORE: London copper edged lower on Tuesday, trading near its weakest level in almost three months, with risk appetite curbed by escalating trade tensions between the United States and top industrial metals consumer China.
Zinc edged down to trade at the last session’s lowest price since early August as rising inventories weighed on the market.
Global stocks extended a sell-off as the mounting trade tensions between the United States and other major economies continued to steer investors away from riskier assets, lifting safe-haven US Treasuries and keeping the dollar on the defensive.
“Rising trade tensions once again weighed on the base metals sector,” ANZ said in a note.
“Soft fundamental data also exacerbated the weakness. Zinc led the sector lower, after data showed the market was in surplus for the first four months of the year.”
The US-China trade spat is putting pressure on commodity and financial markets. A government official told Reuters on Sunday that the Treasury was drafting curbs that would block firms with at least 25 percent Chinese ownership from buying US companies with “industrially significant technology.”
US Treasury Secretary Steven Mnuchin on Monday said forthcoming investment restrictions would not be specific to China, but would apply “to all countries that are trying to steal our technology.”
FUNDAMENTALS
COPPER: Three-month copper on the London Metal Exchange was down 0.3 percent at $6,733.50 a tonne, as of 0717 GMT, not far above Monday’s low of $6,702.50, which was its weakest since April 4. The most-traded copper contract on the Shanghai Futures Exchange dropped 0.4 percent to settle at 51,630 yuan ($7,878) a tonne.
ZINC: Benchmark LME zinc was down 0.4 percent at $2,847 a tonne after dropping earlier in the session to $2,835, matching Monday’s low, which was the weakest since Aug. 7. In China, zinc prices fell to their lowest since early August at 22,380 yuan a tonne.
INVENTORIES: Daily data showed zinc on-warrant inventories – those not earmarked for delivery – in warehouses certified by the London Metal Exchange rose 2,300 tonnes to 241,525 tonnes. They have shot up 83 percent since the beginning of March.
CODELCO: Workers at Codelco’s Chuquicamata copper mine in Chile, the state miner’s second largest by output, are threatening to walk off the job soon to protest plans to transform the century-old open pit into an underground mine, a union leader said.
SAMARCO: Samarco and parent companies Vale SA and BHP Billiton Ltd have signed a deal with Brazilian authorities that settles a 20 billion reais ($5.30 billion) lawsuit related to a 2015 dam burst that killed 19 people.
Source: Brecorder
