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US President Donald Trump announced further tariff considerations against Chinese products, proposing a further $100 billion in trade sanctions.
“The market is still overreacting to Trump’s trade rants. Trade tariffs are long overdue however, and should not be a surprise. What Trump says he doesn’t always do, but the sanctions were a major policy statement in his hearing,” John Meyer, analyst at SP Angel told Metal Bulletin.
“As for metals, a possible reduction in global trade may reduce some demand. But the reality is that some consumers will need to hold greater stocks,” he added.
Nickel has fallen 2.3% this morning, despite being the strongest performer at the close on Thursday. The metal has been unable to stabilize back above $13,500 per tonne due to a lack of sustained positive momentum.
Copper has also experienced a steady decline this morning, dropping nearly $50 per tonne but with volumes remaining low.
Less than 3,000 lots of copper had traded on the LME as of 10:50 am London time, with aluminium slightly higher at 3,661 lots.
“Copper and nickel reacted most sharply to the Trump headlines but yet again the volumes make it hard to read too much into anything just yet,” Matt France, head of institutional sales at Marex Spectron, said.
“Both metals closed well yesterday and it might just be a case of late longs closing out positions as fast as possible until we get more detail or a reaction from China, yet its another case of there being no love for momentum traders right now,” he added.
The three-month aluminium price followed the trend and dived back below $2,000 per tonne, trading close to August 2017 lows.
Lead, zinc and tin also dipped lower while the dollar index remains steady above 90.00.
Base metals complex takes dip
Currency moves and data releases