Copper prices dropped on Monday, pressured by concerns over the outlook for the global economy and metals demand as Washington and Beijing struggled to salvage a deal to end a bitter trade war.
The trade conflict between the world’s top two economies escalated on Friday, with the United States hiking tariffs on $200 billion worth of Chinese goods after President Donald Trump said Beijing “broke the deal” by reneging on earlier commitments made during months of negotiations.
White House economic adviser Larry Kudlow told the “Fox News Sunday” programme that the sticking point was China’s reluctance to put into law changes that had been agreed upon, while Beijing remained defiant.
Meanwhile, copper prices could gain some support from falling output in China as some smelters there are scheduled to go into maintenance in May, said copper analyst He Tianyu of metal consultants CRU.
“Prices should be higher in the coming days, but the macro-economy will likely have a bigger impact on the market,” He said, referring to the ongoing U.S.-China trade talks.
* COPPER PRICES: Three-month copper on the London Metal Exchange (LME) had dropped 0.5% to $6,093 a tonne by 0351 GMT, while the most-traded copper contract on the Shanghai Futures Exchange (ShFE) declined 0.1% to 47,700 yuan ($6,957.00) a tonne.
* ANTOFAGASTA: Copper prices would be 5% to 15% higher without the U.S.-China trade war, the chairman for Chile’s Antofagasta Plc told a Chilean newspaper on Sunday.
* COPPER STOCKS: Copper stocks in warehouses tracked by the ShFE CU-STX-SGH dropped to a 3-1/2-month low 1 on Friday, while copper inventories in LME-approved warehouses fell to a 2-week low on May 9, the latest data showed.
* OTHER PRICES: London aluminium fell 0.4%, nickel was down 0.6% and zinc decreased 0.4%. Shanghai aluminium rose 0.6% and nickel increased 0.5%, while zinc eased 0.1% and lead decreased 0.7%.