News that US President Donald Trump’s administration pledged to raise the proposed tariffs on $200 billion worth of Chinese goods to 25% from an initial 10% has reignited fears of an escalating trade war between the world’s two largest economies.
China’s Ministry of Foreign Affairs has said it will fight back should the US further increase tariffs, sending a fresh wave of nervousness through commodity markets this morning.
Moreover, the base metals complex was also hit by reports that Chinese authorities would continue to clamp down on house prices, according to ANZ Research.
Home owners in the southern Chinese city of Shenzhen will have to hold a property for at least three years before being allowed to sell, according to a statement on the city government’s website earlier this week. The city has also suspended home purchases by corporations and organizations.
Base metals prices on the SHFE fell in response, with heavy losses in nickel (-3.2%) and copper (-1.5%) dragging the rest of the complex lower. Tin bucked the trend, however, to log a marginal gain of 0.3%.
The most-traded September copper contract on the SHFE traded at 49,090 yuan ($7,203) per tonne as at 11.22am Shanghai time, plunging 730 yuan per tonne or 1.5% from Wednesday’s close.
The weakness in the red metal comes despite continued concerns about possible supply disruptions in Chile.
A strike at the world’s largest copper mine, Escondida, is likely to get underway later on Thursday, while a strike at Codelco’s 300,000-tonne-per-year copper mine, Chuquicamata, was instigated in the early hours of Monday. All other metals down, except tin
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