The dollar index hit a fresh 2018 high of 95.03 during trading on late Tuesday afternoon.
“Copper, the proxy that investors use for global economic growth, was weighed down by the stronger dollar,” ANZ Research noted on Wednesday.
Further pressuring the red metal was the pick-up of trade tensions between the United States and China overnight which has dampened investors’ appetite.
The US announced overnight that it will proceed with imposing 25% tariffs on $50 billion-worth of goods imported from China, reigniting a trade war between the two nations.
“China’s commerce ministry released a statement shortly after urging the US to stick to their previous agreement of a meaningful reduction in the trade surplus and noting that China remains confident it can protect the nation’s interest,” ANZ Research added.
Tin was the most resilient of the SHFE base metals this morning, finding support from concerns over tightening raw material supply.
The SHFE September tin contract price edged 30 yuan per tonne higher to 154,700 yuan per tonne as at 10.50am Shanghai time.
“Chinese smelters may have trouble producing enough metal due to falling supply of imported tin concentrate from Myanmar,” Andy Farida, analyst at Metal Bulletin, said. “Therefore, a supply crunch scenario might emerge again,” he added.
Tin stocks at SHFE-listed warehouses fell 590 tonnes to 6,854 tonnes as of May 25.
Other base metals prices under pressure
- The SHFE July aluminium contract price dipped 10 yuan to 14,715 yuan per tonne.
- The SHFE July zinc contract price fell 105 yuan to 24,005 yuan per tonne.
- The SHFE July lead contract price dropped 230 yuan to 19,835 yuan per tonne
- The SHFE July nickel contract price slipped 990 yuan to 111,890 yuan per tonne.
Currency moves and data releases
- The dollar index was up 0.09% at 94.93 as of 10.51am Shanghai time.
- In other commodities, the Brent crude oil spot price was down 0.71% to $74.87 per barrel as of 10.51am Shanghai time.
- In equities, the Shanghai Composite was down by 1.83% to 3063.46 as at 11.08 am Shanghai time.
- The economic agenda is fairly busy today with a host of European and US data, including German retail sales and preliminary consumer price index (CPI) as well as US non-farm employment change, preliminary gross domestic product and wholesale inventories of note.
- Looking ahead to Thursday, Chinese manufacturing and non-manufacturing purchasing managers’ indices (PMI) are scheduled for release at approximately 10am Shanghai time.
|LME snapshot at 03.51am London time|
|Latest three-month LME Prices|
|Price ($ per tonne)||Change since yesterday's close ($)|
|SHFE snapshot at 10.50am Shanghai time|
|Most-traded SHFE contracts|
|Price (yuan per tonne)||Change since yesterday's close (yuan)|
|Changjiang spot snapshot on May 30|
|Range (yuan/t)||Change (yuan)|
|Copper||51,100 — 51,120||-290|
|Aluminium||14,580 — 14,620||-40|