Industrial metals fall as trade war hammers China's yuan
(Updates with closing prices)
By Peter Hobson
LONDON, Aug 22 (Reuters) - Copper and other industrial
metals prices fell on Thursday as the United States and China
exchanged threats in their trade dispute and the yuan slumped to
an 11-year low against the dollar.
Investors fear the trade war is undermining economic growth
and metals usage. A weaker yuan, meanwhile, makes dollar-priced
metals more expensive for Chinese buyers.
China is the world's top consumer of industrial metals, and
higher prices there could damage demand.
Benchmark copper on the London Metal Exchange (LME)
ended down 0.8% at $5,683 a tonne after touching $5,671, the
lowest since Aug. 7.
The weaker yuan and fears over the health of the global
economy were having a bigger impact than supply deficits which
should be supportive for metals prices, said Commerzbank analyst
China was unlikely to quickly implement large-scale economic
stimulus measures that would support demand, he added.
TRADE WAR: Beijing said on Thursday it would retaliate
against new U.S. tariffs on its goods, after President Donald
Trump said he had to confront China over trade even if it caused
short-term harm to the U.S. economy.
Metals prices have fallen sharply since the trade war began
last summer, with copper down more than 20% from a June 2018
FED: Minutes of last month's U.S. Federal Reserve meeting
showed policymakers were deeply divided over whether to cut
interest rates, but united in wanting to signal they were not on
a preset path to more rate cuts.
Interest rate cuts aimed at stimulating economic activity
would be likely to support metals.
EUROPE: Euro zone business growth picked up a touch in
August, helped by brisk services activity and as manufacturing
contracted at a slower pace, but future expectations were their
weakest in over six years, a survey showed.
CODELCO: Chile's Codelco, the world's top copper
producer, said on Wednesday it had shut down its Ventanas
smelter along Chile's central coast for maintenance. It said
this would not impact production.
INDONESIA: Indonesia's nickel miners association said it
would continue asking the government to stick to its 2022
timetable for a nickel ore export ban.
Concerns that Indonesia, a major exporter of nickel, will
move forward implementation of the ban have sparked fears of
supply constraints and helped prices to rally sharply.
ZINC/LEAD: The global zinc market swung into a small surplus
in June, while the lead market flipped to deficit, data from the
International Lead and Zinc Study Group (ILZSG) showed.
OTHER METALS: LME nickel finished down 1.1% at
$15,660 a tonne, zinc fell 1.9% to $2,245, lead
lost 1.3% to $2,058, tin ended unchanged at $16,200 and
aluminium closed 0.7% lower at $1,766.
(Reporting by Peter Hobson; additional reporting by Mai Nguyen;
editing by Jane Merriman, Emelia Sithole-Matarise, Kirsten
First Published: 2019-08-22 04:24:29
Updated 2019-08-22 18:20:33
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