On Wednesday, the 8th of May 2019, copper, widely known as the native metal, had nosedived to a three-month low in the wake of an escalating trade tension between US and China fueling another wave of global-scale slowdown fear.
US President Donald Trump had threatened China on his Sunday’s (May 5th) tweet to either reach a trade deal by this weekend or face a sharp tariff hike of 25 percent from previous 10 percent on $200 billion of Chinese imports, which had significantly raised risks of escalating tensions between two economic superpowers.
If these two countries failed to reach a trade deal by this weekend, which seemed to be more likely, given China’s backtracking on each and every progress made over the recent weeks, a global-scale slowdown would be inevitable, which eventually would cloud demands of top trade-sensitive metals such as copper.
On Wednesday’s (May 8th) market wrap-up, the benchmark copper on the London Metal Exchange had winded down the day 0.5 percent lower at $6,148 per ton, after breaching its lowest figure since February 15th at $6,119 a ton.
Adding that the volatility level could spur up during the trade talk, a Saxo bank analyst, Ole Hansen said, “We are not out of the woods as yet. The market is of the belief that some kind of deal is in the interests of both parties but if there is a complete breakdown, we could see some additional weakness”.
Although copper production at Chile’s top mines had contracted sharply over the recent weeks and local demands had been much higher in contrast to Q1 2019, which should have boosted copper prices, latest figures were largely overshadowed by an exacerbating trade tension between United States and China.
In point of fact, almost all of the industry-oriented metals had witnessed a wobbling trickle on Wednesday’s (May 8th) market, as aluminum shed 1 percent to $1,797 per ton and Zinc was down by 1.6 percent to $2,648.50 a ton, while Nickel eased 1 percent to $11,930 per ton.