Copper, nickel, zinc prices sink on China car sales, trade war
The price of copper dropped to a 15-week low on Monday after China fired back in the mounting trade war with the US. In afternoon trade, copper for delivery in July touched $2.709 a pound ($5,972 a tonne), down 2.4% from Friday’s settlement.
China will match 25% tariffs on $60 billion of goods imported from the US including precious stones like diamonds, rubies and emeralds, iron ore, and nickel, zinc and titanium. Lithium was spared and will continue to attract a 5% duty.
On Friday the US hiked tariffs on $200B of Chinese imports with nearly 6,000 products now incurring a 25% levy, up from 10% previously. The US imports some $540B worth of goods from China per year, while Beijing lets in $120B worth of imports.
Source: LME, Comex
China imports nearly half of the world’s copper, and the country’s economic growth had been slowing well before the trade dispute began to impact the outlook for industrial metals.
Cars and electronics
China also imposed higher duties on a range of electronics and home appliances including television cameras, telecom equipment and microwaves.
In a note last week, Capital Economics points out that certain metals are “much more exposed to disruptions to US-China trade than others.” Given that electronics make up around 30% of total US imports from China, the prices of metals which are used widely in the electronics sector, tin in particular, appear especially at risk, the research firm said.