Copper drops as China prepares to fight back against U.S. tariffs
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl
(Updates with closing prices)
By Eric Onstad
LONDON, Aug 15 (Reuters) - Copper slipped on Thursday after
China said it would hit back against additional U.S. tariffs,
fuelling fears over global growth and metals demand.
Some other industrial metals, however, clawed higher in thin
volumes as investors closed out bearish positions.
China has to take necessary counter-measures to the latest
U.S. tariffs on $300 billion of Chinese goods, the finance
ministry said on Thursday, while U.S. President Donald Trump
said any trade deal with China must be on U.S. terms.
The macroeconomic situation remains bad despite hopes in
some quarters for more stimulus to stabilise China's economy
further, said Gianclaudio Torlizzi, partner at the T-Commodity
consultancy in Milan.
"In the very short term we could see some more downside as
long as the macro doesn't improve," he said. "But if you have a
longer-term view, we are approaching nice buying areas for the
big metals. It's a nice opportunity to get some exposure."
Metals fell on Wednesday after an inversion of U.S.
government bond yields on Wednesday sparked fears that the
world's biggest economy would sink into recession, dragging the
rest of the globe with it.
Benchmark copper on the London Metal Exchange shed
0.2% to $5,751 a tonne in final open-outcry trading, after
dropping as far as $5,640 this month, setting a two-year low.
* CHINA PROPERTY: Prices of new homes in China rose in July
but the year-on-year growth of 9.7% was the weakest so far this
year. The construction industry is one of the biggest consumers
of industrial metals.
* COPPER STOCKS: Copper inventories in LME-registered
warehouses jumped 11%, or 29,950 tonnes, to 301,750 tonnes,
indicating healthier short-term supplies.
* CHINA COPPER PREMIUMS: Shanghai copper premiums
<SMM-CUYP-CN> have risen 12% over the past two weeks to $68 a
"A combination of low stockpiles in China and an open arb
window earlier this month prompted increased buying appetite
from traders, particularly for nearby cargoes," BMO Capital
analyst Colin Hamilton said in a note.
* NICKEL SPREADS: LME cash nickel flipped to a premium of
$13 a tonne over the three-month contract by Wednesday's close.
<CMNI0-3> That was the strongest premium since mid-May and up
from a discount of $11 a day earlier.
This indicates near-term shortages of metal in LME
warehouses, which could be exacerbated by one party holding
50%-80% of available nickel LME inventories, LME data showed.
LME three-month nickel climbed 1.9% to finish at $16,250 a
tonne after hitting a 16-month high last week on concerns over
supply disruption in Indonesia.
* ALUMINIUM: LME aluminium ticked 0.4% higher to end
at $1,782 a tonne amid ongoing concerns about disruptions after
floods in the smelting heartland of China's eastern province of
* PRICES: LME zinc gained 0.4% to close at $2,264 a
tonne, lead rose 1.1% to $2,064 and tin added
0.1% to $17,145.
* For the top stories in metals and other news, click
(Additional reporting by Tom Daly in Beijing and Mai Nguyen in
Editing by David Goodman/Alexandra Hudson/Susan Fenton)
First Published: 2019-08-15 03:48:58
Updated 2019-08-15 18:08:20
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