Shanghai Copper Drops to 3-Week low as Trade war Escalates

China’s copper futures prices fell to their lowest in three weeks, as demand prospects for base metals weakened following the latest escalation in the Sino-U.S. trade war.

U.S. President Donald Trump on Friday announced a 5% additional duty on $550 billion in targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. products.

The most-traded copper contract on the Shanghai Futures Exchange fell for the fourth straight session, dropping as much as 1% to 45,830 yuan ($6,461.48) a tonne, its lowest since Aug. 5. It ended down 0.6% at the close.

China also said it will impose an extra 5% tariff on imports of copper scrap and aluminium scrap from the United States from Dec. 15, adding to the 25% levy on copper scrap from a previous round of duties.

“The escalation suggests uncertainty will continue to weigh on global trade, industrial production and investment, with no sign of a resolution,” ANZ said in a note.


* PRICES: Shanghai aluminium closed down 0.5%, zinc decreased 0.9%, lead was 0.8% lower and tin dropped 0.9% while nickel rose 0.8%.

* LME: The London Metal Exchange is closed on Monday for a bank holiday and will reopen on Tuesday.

* CHINA: China plans to ease capital requirement for infrastructure projects in the second half this year, in a bid to boost investment and fend off rising headwinds in the slowing economy, the state planner said.

* TRADE: President Donald Trump said on Monday China had contacted U.S. trade officials overnight to say it wanted to return to the negotiating table.

* HONGQIAO: China Hongqiao, the world’s biggest aluminium producer, on Friday cut its 2019 production guidance by up to 300,000 tonnes, or almost 5%, after recent flooding on its premises.

* ALUMINIUM: Analysts at Wood Mackenzie said output cuts in China would widen a deficit in China to 1 million tonnes and globally to 1.4 million tonnes, which they said could push prices above $1,800 a tonne.

* COPPER: China’s refined copper cathode imports rose 37.6% in July from the previous month to 292,201 tonnes but was down 8% year-on-year, according to Reuters calculations based on data released by the General Administration of Customs on Sunday.

* SPOT COPPER: The Qianhai Mercantile Exchange, a mainland China spot commodities platform owned by Hong Kong Exchanges and Clearing Ltd, started trading copper rods on Friday, adding to existing trade of alumina and aluminium products.


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