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Copper prices led on the downside with the most-traded may copper contract on the SHFE falling to 49,310 yuan ($7,808) per tonne as of 10.19am Shanghai time, down by 800 yuan or 1.6% from last Friday’s close.
Escalating tensions between the US and China has sparked a wave of selling and nervousness across the base metals complex.
“The action [of President Donald Trump signing off on import tariffs for Chinese products on March 22] from the White House unnerved the US stock market. The sell-off triggered a wave of liquidation in a number of commodity markets… base metals lost significant ground,” INTL FCStone analyst Ed Meir said last Friday.
“For the time being, trade headlines will dominate sentiment at the expense of almost everything else. Let’s hope cooler heads prevail and that the politicians don’t push the global economy into the ditch,” he added.
On Friday, China responded to Trump’s Section 232 tariffs on steel and aluminium imports by announcing plans to impose tariffs on approximately $3 billion worth of US-origin goods, including seamless steel pipes and aluminium scrap.
“China’s response only strengthened the view that global economic growth could be affected by this escalation in trade tension,” ANZ Research said in its morning note.
In energy markets, China launched its first crude oil futures contract on the Shanghai International Energy Exchange on Monday, giving the world’s largest oil importer – China imports 67% of the oil it consumes – its overdue say in the pricing of crude oil.
The yuan-denominated contracts, which will be open to both domestic and foreign investors, will give the Shanghai International Energy Exchange a share of the global oil futures trading that is measured in trillions of dollars.
Base metals prices
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